- Fourth Quarter 2014 results from
continuing operations included:
- Net sales of $172.8 million, up 19.4
percent year-over-year
- Net loss of $0.10 per share
- Adjusted EBITDA of $15.6 million, up
59.2 percent year-over-year
- Full year 2014 results from continuing
operations included:
- Net sales of $705.2 million, up 9.7
percent year-over-year
- Net loss of $0.04 per share
- Adjusted EBITDA of $78.0 million, up
66.0 percent year-over-year
- Company generates positive free cash
flow for first time since 2007
- Strong core market conditions and
expected share gains support Company’s projected 2015 growth and
profitability improvement
Accuride Corporation (NYSE: ACW) – a leading supplier of
components to the North American commercial vehicle industry –
today reported strong financial results for the fourth quarter and
fiscal year ended December 31, 2014. The results demonstrate the
power of Accuride’s “Fix & Grow” investments to deliver
world-class operating metrics, reduce fixed costs and support
ongoing margin improvement.
Fourth Quarter 2014 Results
Fourth quarter 2014 net sales from continuing operations were
$172.8 million, compared with $144.7 million in the same period in
2013, an increase of 19.4 percent, primarily reflecting the impact
of stronger industry conditions in the Company’s Wheels and
Brillion segments during the quarter. Accuride’s operating income
was $3.7 million for the quarter, as compared to an operating loss
of $1.7 million in the fourth quarter of 2013. The Company reported
a net loss of $5.1 million, or $0.10 per share, during the quarter,
compared to net income of $1.9 million, or $0.04 per share, in
2013. Fourth quarter Adjusted EBITDA increased by 59.2 percent
year-over-year to $15.6 million, or 9.1 percent of net sales,
compared to $9.8 million, or 6.8 percent of net sales, in the same
quarter of 2013. As of December 31, 2014, Accuride had $29.8
million of cash plus $40.5 million in availability under its ABL
Credit Facility for total liquidity of $70.3 million.
Fiscal Year 2014 Results
Net sales from continuing operations for the fiscal year ended
December 31, 2014 were $705.2 million, compared with $642.9 million
in the prior year, an increase of 9.7 percent. The net sales
increase was primarily due to higher vehicle production by North
American commercial vehicle manufacturers and strengthening in
certain industrial end-markets Brillion serves. Accuride reported a
loss per share of $0.04 for the year ended December 31, 2014.
Adjusted EBITDA from continuing operations for fiscal-year 2014 was
$78.0 million, or 11.1 percent of net sales, compared to $47.0
million, or 7.3 percent of net sales, in the prior year.
Industry Conditions
In the fourth quarter, North American truck and trailer
production continued to increase at a double-digit pace, as
expected. Class 8, Class 5-7 and trailer production grew by 27
percent, 13 percent and 25 percent, respectively, compared to 2013.
Class 8 net orders remained strong as lower fuel prices and higher
profitability enabled fleets to replace aging equipment and expand
their operations. Class 8 net orders were up 66 percent for all of
2014. This order strength is expected to translate into increased
OEM production levels over the next several quarters, with
full-year Class 8 production projected to 13 percent higher than
2014 levels. Trailer segment net orders in the fourth quarter
ranked among the top 10 order months in history. As a result,
trailer builds are expected to grow by approximately 10 percent
over 2014 levels. Driven by the expanding U.S. economy,
fourth-quarter Medium-duty segment orders increased by 20 percent
year-over-year and full-year production is projected to be up 3
percent over 2014 levels. Fleets are generally optimistic about
current conditions within the trucking industry. Freight tonnage is
forecasted to steadily increase throughout the next several years,
which will continue to drive increased demand for trucks and
trailers going forward. Brillion’s end market continued to show
improvements with revenue up 48 percent in fourth quarter compared
to the previous year. Certain Brillion end markets are projected to
continue their recovery in 2015, with revenue expected to be up 5
percent to 10 percent compared to 2014.
Fourth Quarter Business Segment Results
Accuride Wheels
Accuride Wheels segment net sales were $102.1 million, up $18.1
million, or 21.5 percent, from the same period in 2013, primarily
due to stronger OEM demand and market share gains in the
aftermarket. Wheels’ Adjusted EBITDA was $17.6 million, an increase
of $2.9 million, or 19.7 percent, from the fourth quarter of 2013.
Wheels flexed its available aluminum wheel capacity to meet rising
customer demand.
Gunite
Gunite segment net sales of $36.6 million were down $1.0
million, or 2.7 percent, from the fourth quarter of 2013,
attributable primarily to slightly lower aftermarket demand for
brake drums. Despite the decrease, Gunite’s Adjusted EBITDA
improved to $3.5 million, from $2.7 million in the fourth quarter
of 2013. The gain reflects continued operational improvement
resulting from the Company’s “Fix & Grow” investments in the
business since 2011. For 2014, Gunite’s Adjusted EBITDA as a
percentage of net sales was 12.6 percent, reaching its highest
level since 2006 and exceeding the Company’s previous
expectations.
Brillion Iron Works
Brillion Iron Works’ fourth quarter net sales were $34.1
million, up $11.0 million, or 47.6 percent, from the fourth quarter
of 2013 on higher customer volumes. Brillion’s Adjusted EBITDA was
$2.3 million, an increase of $2.8 million, from the fourth quarter
of 2013. The Company currently expects Brillion to achieve top-line
growth of 5 percent to 10 percent in 2015, as demand continues to
improve in several of its primary end markets.
Liquidity and Debt
As of December 31, 2014, total debt was $323.2 million,
consisting of $306.2 million of our outstanding 9.5% senior secured
notes, net of discount, and a $17.0 million draw on our ABL Credit
Facility, which is a reduction of $8 million from the previous
quarter. As of December 31, 2014, Accuride had $29.8 million of
cash plus $40.5 million in availability under its ABL Credit
Facility, for total liquidity of $70.3 million.
Business and Market Outlook
"We are pleased with the strong fourth-quarter and full year
results Accuride delivered in 2014, and expect 2015 to be an even
better year for us," said Rick Dauch, Accuride President and CEO.
“As favorable freight volumes and fuel prices have enabled many
fleets to expand their operations, truck and trailer production
levels have climbed to the best we’ve seen in a decade. Accuride
has sufficient, capable capacity in place to meet and sustain this
demand, grow our share and respond quickly when volumes increase.
Our ability to manage rising demand for our high-quality aluminum
wheels demonstrates this, confirming our decision to invest $55
million to double our aluminum capacity in the past three years. As
we drive these higher volumes across our more efficient assets,
Accuride's focus in 2015 is on converting higher revenues into even
stronger bottom-line performance."
2015 Financial Guidance
As previously announced, Accuride management expects the
Company’s 2015 net sales to be in the range of $725 million to $775
million, and Adjusted EBITDA to be in the range of $85 million to
$95 million. The midpoints of the Company’s revenue and Adjusted
EBITDA ranges represent increases of 6 percent and 15 percent,
respectively, over Accuride’s 2014 results. The Company has based
its 2015 guidance on the following projections for the North
American commercial vehicle industry: Class 8 production in the
range of 310,000 to 330,000 units, Class 5-7 production in the
range of 220,000 to 225,000 units and Trailer segment production in
the range of 280,000 to 300,000 units. In addition, management
expects net sales for the Brillion business unit to be up 5 percent
to 10 percent versus 2014, as demand continues to improve in
several of its primary end markets.
Earnings Conference Call Information
Accuride will host a conference call to discuss the financial
and operational results of its Fourth Quarter and Full-Year Fiscal
2014 on Tuesday, March 3, 2015, beginning at 9:00 a.m. CST.
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 39017653. A live
webcast of the conference call can be accessed via the Investors
section of the company’s website – www.AccurideCorp.com/investors.
A replay will be available from March 3, 2015, at 11:30 a.m. CST
until 11:59 p.m. CST, March 10, 2015, by calling (888) 843-7419 in
the United States, or (630) 652-3042 internationally, using access
code 39017653.
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(UNAUDITED)
Three Months Ended December 31,
(Dollars in thousands) 2014 2013
Net sales: Wheels $ 102,088 59.1 % $ 84,006 58.1 % Gunite
36,629 21.2 % 37,634 26.0 % Brillion Iron Works 34,095 19.7
% 23,051 15.9 % Total net sales $ 172,812 100.0 % $ 144,691
100.0 % Gross Profit $ 14,121 8.2 % $ 8,702 6.0 %
Income (Loss) from Operations: Wheels $ 8,377 8.2 % $ 5,416 6.4 %
Gunite 2,040 5.6 % 1,203 3.2 % Brillion Iron Works 1,079 3.2 %
(1,699) (7.4) % Corporate / Other (7,775) — (6,589) —
Consolidated Total $ 3,721 2.2 % $ (1,669) (1.2) % Net
Income (Loss) $ (5,128) (3.0) % $ 1,611 1.1 % Adjusted
EBITDA: Wheels $ 17,564 17.2 % $ 14,733 17.5 % Gunite 3,518 9.6 %
2,745 7.3 % Brillion Iron Works 2,257 6.6 % (549) (2.4) % Corporate
/ Other (7,693) — (7,103) — Continuing Operations $
15,646 9.1 % $ 9,826 6.8 % Brillion Farm — — (50) — Imperial
Group — — (150) — % Consolidated Total $ 15,646 9.1 %
$ 9,626 6.7 %
Fiscal Year Operating
Results(UNAUDITED)
Year Ended December 31,
(Dollars in thousands) 2014 2013
Net sales: Wheels $ 402,146 57.0 % $ 364,614 56.7 % Gunite
171,263 24.3 % 168,988 26.3 % Brillion Iron Works 131,769
18.7 % 109,281 17.0 % Total net sales $ 705,178 100.0 % $
642,883 100.0 % Gross Profit $ 73,478 10.4 % $ 43,956 6.8 %
Income (Loss) from Operations: Wheels $ 41,823 10.4 % $
30,883 8.5 % Gunite 16,710 9.8 % 2,599 1.5 % Brillion Iron Works
4,523 3.4 % 1,027 0.9 % Corporate / Other (30,418) —
(35,741) — Consolidated Total $ 32,638 4.6 % $ (1,232) (0.2) %
Net Income (Loss) $ (2,307) (0.3) % $ (38,313) (6.0) %
Adjusted EBITDA: Wheels $ 78,665 19.6 % $ 68,487 18.8 %
Gunite 21,536 12.6 % 8,230 4.9 % Brillion Iron Works 9,072 6.9 %
5,885 5.4 % Corporate / Other (31,279) — (35,559) —
Continuing Operations $ 77,994 11.1 % $ 47,043 7.3 %
Brillion Farm — — (137) — Imperial Group — — (869)
(1.2) % Consolidated Total $ 77,994 11.1 % $ 46,037 6.4 %
ACCURIDE CORPORATION AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)(UNAUDITED)
Three Months Ended December 31,
Year Ended December 31,
(In thousands except per share data) 2014
2013 2014 2013 NET SALES $
172,812 $ 144,691 $ 705,178 $ 642,883 COST OF GOODS SOLD
158,691 135,989 631,700 598,927 GROSS PROFIT
14,121 8,702 73,478 43,956 OPERATING EXPENSES: Selling, general and
administrative 10,400 10,371 40,840
45,188 INCOME (LOSS) FROM OPERATIONS 3,721 (1,669) 32,638 (1,232)
OTHER INCOME (EXPENSE): Interest expense, net (8,362) (8,465)
(33,713) (35,027) Other income (loss), net (2,002)
(570) (3,506) (320) LOSS BEFORE INCOME TAXES FROM
CONTINUING OPERATIONS (6,643) (10,704) (4,581) (36,579) INCOME TAX
BENEFIT (1,560) (12,622) (2,527)
(10,244) INCOME (LOSS) FROM CONTINUING OPERATIONS (5,083) 1,918
(2,054) (26,335) DISCONTINUED OPERATIONS, NET OF TAX (45)
(307) (253) (11,978) NET INCOME (LOSS) $
(5,128) $ 1,611 $ (2,307) $ (38,313) OTHER COMPREHENSIVE INCOME
(LOSS), NET OF TAX: Defined benefit plans (31,871)
30,941 (30,926) 33,122 COMPREHENSIVE INCOME (LOSS) $
(36,999) $ 32,552 $ (33,233) $ (5,191) Weighted average common
shares outstanding—basic 47,749 47,588 47,708 47,548 Basic income
(loss) per share-continuing operations (0.10) 0.04 (0.04) (0.56)
Basic loss per share-discontinued operations — (0.01)
(0.01) (0.25) Basic income (loss) per share $ (0.10)
$ 0.03 $ (0.05) $ (0.81) Weighted average common shares
outstanding—diluted 47,749 47,950 47,708 47,548 Diluted income
(loss) per share-continuing operations (0.10) 0.04 (0.04) (0.56)
Diluted loss per share-discontinued operations —
(0.01) (0.01) (0.25) Diluted income (loss) per share
$ (0.10) $ 0.03 $ (0.05) $ (0.81)
ACCURIDE CORPORATIONCONSOLIDATED
ADJUSTED EBITDA(UNAUDITED)
Three Months Ended December 31,
(In thousands) 2014 2013 Net
income (loss) $ (5,128) $ 1,611 Income tax benefit (1,560) (12,622)
Interest expense, net 8,362 8,465 Depreciation and amortization
10,869 10,790 Restructuring, severance and other charges1 442 253
Other items related to our credit agreement2 2,661
1,129 Adjusted EBITDA $ 15,646 $ 9,626
Note:
1) For the three months ended December 31, 2014, Adjusted
EBITDA represents net income before net interest expense, income
tax expense, depreciation and amortization, plus $0.4 million in
costs associated with restructuring items. For the three months
ended December 31, 2013, Adjusted EBITDA represents net income
before net interest expense, income tax benefit, depreciation and
amortization, plus $0.3 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 December 31, 2014, items related to our credit
agreement consisted of foreign currency losses and other income or
expenses of $2.7 million. For the three months ended December 31,
2013, items related to our credit agreement consisted of foreign
currency losses and other income or expenses of $1.1 million.
Year Ended December 31,
(In thousands) 2014 2013 Net
income (loss) $ (2,307) $ (38,313) Income tax benefit (2,527)
(10,244) Interest expense, net 33,713 35,027 Depreciation and
amortization 41,873 44,329 Restructuring, severance and other
charges1 1,069 11,550 Other items related to our credit agreement2
6,173 3,688 Adjusted EBITDA $ 77,994 $ 46,037
Note:
1) For the Year Ended December 31, 2014, Adjusted EBITDA
represents net income before net interest expense, income tax
expense, depreciation and amortization, plus $1.1 million in costs
associated with restructuring items. For the Year Ended December
31, 2013, Adjusted EBITDA represents net income before net interest
expense, income tax benefit, depreciation and amortization, plus
$11.6 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 Year Ended December 31, 2014, items
related to our credit agreement consisted of foreign currency
losses and other income or expenses of $6.2 million. For the Year
Ended December 31, 2013, items related to our credit agreement
consisted of foreign currency losses and other income or expenses
of $3.7 million.
ACCURIDE CORPORATIONSEGMENT
ADJUSTED EBITDA RECONCILIATION(UNAUDITED)
Three Months Ended December 31, 2014
(In thousands)
Income
(loss)fromOperations
Depreciation
andAmortization
Other
AdjustedEBITDA
Wheels $ 8,377 $ 7,987 $ 1,200 $ 17,564 Gunite 2,040 1,228 250
3,518 Brillion Iron Works 1,079 1,148 30 2,257 Corporate / Other
(7,775) 495 (413) (7,693) Continuing
Operations $ 3,721 $ 10,858 $ 1,067 $ 15,646 Imperial Group
(11) 11 — — Consolidated Total $ 3,710
$ 10,869 $ 1,067 $ 15,646 Three Months Ended December
31, 2013
(In thousands)
Income
(loss)fromOperations
Depreciation
andAmortization
Other
AdjustedEBITDA
Wheels $ 5,416 $ 7,892 $ 1,425 $ 14,733 Gunite 1,203 1,288 254
2,745 Brillion Iron Works (1,699) 1,119 31 (549) Corporate / Other
(6,589) 482 (996) (7,103) Continuing
Operations $ (1,669) $ 10,781 $ 714 $ 9,826 Brillion Farm
(50) — — (50) Imperial Group (159) 9 —
(150) Consolidated Total $ (1,878) $ 10,790 $ 714 $ 9,626
Year Ended December 31, 2014
(In thousands)
Income
(loss)fromOperations
Depreciation
andAmortization
Other
AdjustedEBITDA
Wheels $ 41,823 $ 31,695 $ 5,147 $ 78,665 Gunite 16,710 3,826 1,000
21,536 Brillion Iron Works 4,523 4,429 120 9,072 Corporate / Other
(30,418) 1,881 (2,742) (31,279)
Continuing Operations $ 32,638 $ 41,831 $ 3,525 $ 77,994
Imperial Group (42) 42 — — Consolidated
Total $ 32,596 $ 41,873 $ 3,525 $ 77,994 Year Ended
December 31, 2013
(In thousands)
Income
(loss)fromOperations
Depreciation
andAmortization
Other
AdjustedEBITDA
Wheels $ 30,883 $ 31,700 $ 5,904 $ 68,487 Gunite 2,599 4,709 922
8,230 Brillion Iron Works 1,027 4,400 458 5,885 Corporate / Other
(35,741) 2,631 (2,449) (35,559)
Continuing Operations $ (1,232) $ 43,440 $ 4,835 $ 47,043
Brillion Farm (137) — — (137) Imperial Group (1,758)
889 — (869) Consolidated Total $ (3,127) $ 44,329 $
4,835 $ 46,037
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 CORPORATIONCONDENSED
CONSOLIDATED BALANCE SHEETS(UNAUDITED)
December 31,
December 31, (In thousands) 2014 2013
ASSETS CURRENT ASSETS: Cash and cash equivalents $
29,773 $ 33,426 Customer and other receivables 63,570 59,520
Inventories 43,065 39,329 Other current assets 13,472
16,993 Total current assets 149,880 149,268 PROPERTY, PLANT AND
EQUIPMENT, net 212,183 219,624 OTHER ASSETS: Goodwill and other
assets 236,359 242,885 TOTAL $ 598,422 $ 611,777
LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES:
Accounts payable $ 56,452 $ 47,527 Other current liabilities
40,619 42,472 Total current liabilities 97,071 89,999
LONG-TERM DEBT 323,234 330,183 OTHER LIABILITIES 147,314 129,711
STOCKHOLDERS’ EQUITY: Total stockholders’ equity 30,803
61,884 TOTAL $ 598,422 $ 611,777
Accuride CorporationInvestor Relations:Todd Taylor,
812-962-5105ttaylor@accuridecorp.comorMedia Relations:Timothy G.
Weir, APR, 812-962-5128tweir@accuridecorp.com
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