- Third Quarter 2015 results from
continuing operations included:
- Net sales of $163.4 million, down 11.2
percent year-over-year
- Adjusted EBITDA of $19.2 million, down
9.5 percent year-over-year
- Net Income of $0.04 per share compared
to $0.02 in 2014
- Acquired intellectual property rights
to revolutionary lightweight wheel-end technology
- Reducing revenue and EBITDA guidance to
reflect continued softening in Brillion’s end markets:
- 2015 net sales expected to be in the
range of $675 million to $700 million
- Adjusted EBITDA expected to be in the
range of $80 million to $85 million
Accuride Corporation (NYSE:ACW) – a leading supplier of
components to the North American commercial vehicle industry –
today reported financial results for the third quarter ended
September 30, 2015.
Third Quarter 2015 Results
Third quarter 2015 net sales were $163.4 million, compared with
$184.0 million in the same period in 2014, a decrease of 11.2
percent, primarily due to lower pricing related to lower raw
material costs in Wheels and Gunite and weaker end-market
conditions at Brillion Iron Works during the quarter. Accuride’s
operating income was $7.5 million for the quarter, compared to
operating income of $10.0 million in the third quarter of 2014. The
Company reported income from continuing operations of $1.8 million,
or $0.04 per share, during the quarter, compared to income from
continuing operations of $1.2 million, or $0.02 per share, in 2014.
Income from continuing operations in 2015 included a tax benefit of
$3.7 million, or $0.07 per share, related to a change in
postretirement benefits. Third quarter Adjusted EBITDA decreased by
9.5 percent year-over-year to $19.2 million, or 11.7 percent of net
sales, compared to $21.2 million, or 11.5 percent of net sales, in
the same quarter of 2014. As of September 30, 2015, Accuride had
$39.1 million of cash plus $42.1 million in availability under its
ABL Credit Facility, for total liquidity of $81.2 million.
Industry Conditions
North American commercial vehicle industry conditions remained
robust in the third quarter, with Class 8 truck and Trailer
production increasing by 4 percent and 12 percent, respectively,
over 2014. Class 5-7 truck production slipped by 5 percent versus
2014, but the backlog remains healthy at 7 percent above 2014
levels. The Class 8 backlog also remains strong at 20 percent above
year-ago levels, while the Trailer backlog is 33 percent above last
year. Class 8 truck and Trailer net orders returned to more
seasonal levels through the quarter and, as a result, Class 8 OEM
production has begun to moderate. Demand in the medium duty segment
is steady. Fleets are generally optimistic about current industry
conditions, despite some driver-shortage constraints, as U.S.
freight tonnage is forecasted to steadily increase over the next
several years.
Third Quarter Business Segment Results
Accuride Wheels
Accuride Wheels segment net sales were $101.8 million, down $4.9
million, or 4.5 percent, from the same period in 2014, primarily
due to lower pricing related to lower raw material costs. Despite
lower sales, Wheels’ Adjusted EBITDA was $22.4 million, an increase
of $1.4 million, or 6.7 percent, from the third quarter of
2014.
Gunite
Gunite segment net sales of $43.8 million were up $1.5 million,
or 3.5 percent, from the third quarter of 2014, primarily due to
increased demand for brake drums which was partially offset by
lower year-over-year pricing related to lower raw material costs.
Gunite’s Adjusted EBITDA increased by $1.1 million to $6.5 million
from $5.4 million in the third quarter of 2014.
Brillion Iron Works
Brillion Iron Works’ third quarter net sales were $17.8 million,
down $17.2 million, or 49.2 percent, from the third quarter of 2014
due to lower customer demand. Brillion’s Adjusted EBITDA was a
negative $2.4 million, a decrease of $5.2 million, from the third
quarter of 2014. The Company currently expects Brillion’s 2015 net
sales to be 25 percent to 30 percent lower year-over-year. This
primarily reflects the impact of global commodity prices on demand
in Brillion's oil and gas, agricultural and mining end markets.
Liquidity and Debt
As of September 30, 2015, total debt was $322.0 million,
consisting of $307.0 million of our outstanding 9.5% senior secured
notes, net of discount, and a $15.0 million draw on our ABL Credit
Facility. As of September 30, 2015, Accuride had $39.1 million of
cash plus $42.1 million in availability under its ABL Credit
Facility, for total liquidity of $81.2 million.
Business Acquisition
On July 2, 2015, the Company entered into an agreement to
acquire substantially all of the assets of Century-3 Plus, L.L.C.,
a designer and manufacturer of advanced lightweight metal matrix
composite brake components for the military and commercial
vehicles. Pursuant to the agreement, the Company purchased the
acquired assets for $2.0 million in cash paid at closing and $8.0
million in contingent consideration. The contingent purchase price
maximum of $8.0 million can be earned based on the achievement of
certain technological and commercial milestones.
Business and Market Outlook
"We are pleased with our profitable performance in the quarter
which keeps us on track to achieve positive free cash flow and
profitability for the first time in nearly a decade," Accuride
President and CEO Rick Dauch said. "We acted quickly to restructure
Brillion in response to the sharp decline in revenue it experienced
due to recessionary conditions in its primary markets. This
response limited the impact to Accuride’s overall results and
helped improve our EBITDA margins for the quarter. Our near-term
focus remains squarely on improving our cost structure while
gaining market share through new products and favorable renewals of
long-term contracts with our customers. Looking ahead, we are
excited about the growth opportunities inherent in our acquisition
of the lightweight metal matrix composite brake drum technology.
The technology’s ability to significantly reduce component weight
without sacrificing performance or durability will enable Gunite to
deliver real value to its commercial vehicle and military
customers’ ongoing efforts to reduce weight and improve fuel
efficiency.”
2015 Financial Guidance
Accuride management expects the Company’s 2015 net sales to be
in the range of $675 million to $700 million, and Adjusted EBITDA
to be in the range of $80 million to $85 million. The midpoints of
the Company’s revenue and Adjusted EBITDA ranges represent a
decrease of 3 percent and an increase of 9 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 down by 25 percent
to 30 percent versus 2014 due to continued softness in its oil and
gas, agricultural and mining end markets.
Earnings Conference Call Information
Accuride will host a conference call to discuss the financial
and operational results of its Third Quarter 2015 on Monday,
November 2, 2015, beginning at 9:00 a.m. CST. Analysts and
investors may participate on the conference call by dialing (855)
542-4217 in the United States, or (412) 455-6081 internationally,
and using participant code 71474897. A live webcast of the call can
be accessed at the Accuride website Investors section:
www.AccurideCorp.com/investors. A replay will be available from
November 2, 2015, at Noon CST until 10:59 p.m. CST, November 9,
2015, by calling (855) 859-2056 in the United States, or (404)
537-3406 internationally, using access code 71474897.
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, 2014.
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 September
30,
(Dollars in thousands) 2015
2014
Net sales: Wheels $ 101,833 62.3 % $ 106,685 58.0 %
Gunite 43,823 26.8 % 42,357 23.0 % Brillion
17,772
10.9
% 34,965
19.0
% Total net sales $ 163,428 100.0 % $ 184,007 100.0 % Gross
Profit $ 18,263 11.2 % $ 19,912 10.8 % Income (loss) from
Operations: Wheels $ 13,715 13.5 % $ 11,847 11.1 % Gunite 5,061
11.5 % 4,149 9.8 % Brillion Iron Works (3,650) (20.5) % 1,680 4.8 %
Corporate / Other (7,628) —
(7,632) — Consolidated Total $ 7,498 4.6 % $ 10,044 5.5 %
Net Income $ 1,820 1.1 % $ 1,099 0.6 % Adjusted
EBITDA: Wheels $ 22,384 22.0 % $ 20,971 19.7 % Gunite 6,468 14.8 %
5,397 12.7 % Brillion Iron Works (2,443) (13.7) % 2,796 8.0 %
Corporate / Other (7,256) —
(8,006) — Continuing Operations $ 19,153 11.7 % $ 21,158
11.5 %
Nine Months Operating Results
(UNAUDITED)
Nine Months Ended September 30,
(Dollars in thousands) 2015
2014
Net sales: Wheels $ 324,525 61.0 % $ 300,058 56.4 %
Gunite 128,569 24.1 % 134,634 25.3 % Brillion
79,373
14.9
% 97,674
18.3
% Total net sales $ 532,467 100.0 % $ 532,366 100.0 % Gross
Profit $ 65,100 12.2 % $ 59,357 11.1 % Income (loss) from
Operations: Wheels $ 44,372 13.7 % $ 33,446 11.1 % Gunite 15,140
11.8 % 14,670 10.9 % Brillion Iron Works (2,924) (3.7) % 3,444 3.5
% Corporate / Other (25,578) -
(22,643) - Consolidated Total $ 31,010 5.8 % $ 28,917 5.4 %
Net Income $ 7,571 1.4 % $ 2,821 0.5 % Adjusted
EBITDA: Wheels $ 70,703 21.8 % $ 61,101 20.4 % Gunite 19,238 15.0 %
18,018 13.4 % Brillion Iron Works 682 0.9 % 6,815 7.0 % Corporate /
Other (24,282) — (23,586)
— Continuing Operations $ 66,341 12.5 % $ 62,348 11.7 %
ACCURIDE CORPORATION AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
Three Months EndedSeptember
30,
Nine Months EndedSeptember
30,
(In thousands except per share data) 2015
2014 2015
2014 NET SALES $ 163,428 $
184,007 $ 532,467 $ 532,366 COST
OF GOODS SOLD 145,165 164,095 467,367 473,009 GROSS PROFIT 18,263
19,912 65,100 59,357 OPERATING EXPENSES: Selling, general and
administrative 10,765 9,868 34,090 30,440 INCOME FROM OPERATIONS
7,498 10,044 31,010 28,917 OTHER EXPENSE: Interest expense, net
(8,249) (8,444) (24,953) (25,351) Other loss, net (1,142) (805)
(2,398) (1,504) INCOME (LOSS) BEFORE INCOME TAXES FROM CONTINUING
OPERATIONS (1,893) 795 3,659 2,062 INCOME TAX BENEFIT (3,671) (410)
(3,663) (967) INCOME FROM CONTINUING OPERATIONS 1,778 1,205 7,322
3,029 DISCONTINUED OPERATIONS, NET OF TAX 42 (106) 249 (208) NET
INCOME $ 1,820 $ 1,099 $
7,571 $ 2,821 OTHER COMPREHENSIVE INCOME (LOSS), NET
OF TAX: Defined benefit plans (3,259) 472 15,581 945 COMPREHENSIVE
INCOME (LOSS) $ (1,439) $ 1,571 $
23,152 $ 3,766 Weighted average common
shares outstanding—basic 48,015 47,749 47,943 47,694 Basic income
per share-continuing operations 0.04 0.02 0.15 0.06 Basic income
per share-discontinued operations — — 0.01 — Basic income per share
$ 0.04 $ 0.02 $ 0.16 $
0.06 Weighted average common shares
outstanding—diluted 49,422 49,042 48,844 48,531 Diluted income per
share-continuing operations 0.04 0.02 0.15 0.06 Diluted income per
share-discontinued operations — — 0.01 — Diluted income per share $
0.04 $ 0.02 $ 0.16 $
0.06
ACCURIDE CORPORATION
CONSOLIDATED ADJUSTED EBITDA
(UNAUDITED)
Three Months Ended
September 30,
(In thousands)
2015 2014 Net income $
1,820 $ 1,099 Income tax benefit (3,671) (410)
Interest expense, net 8,249 8,444 Depreciation and amortization
10,491 10,502 Restructuring, severance and other charges1 476 —
Other items related to our credit agreement2 1,788
1,523 Adjusted EBITDA $ 19,153 $ 21,158
Note:
1) For the three months ended September 30, 2015, Adjusted
EBITDA represents net income before net interest expense, income
tax expense, depreciation and amortization, plus $0.5 million in
costs associated with restructuring items. For the three months
ended September 30, 2014, Adjusted EBITDA represents net income
before net interest expense, income tax benefit, depreciation and
amortization. 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
September 30, 2015, items related to our credit agreement consisted
of foreign currency losses and other income or expenses of $1.8
million. For the three months ended September 30, 2014, items
related to our credit agreement consisted of foreign currency
losses and other income or expenses of $1.5 million.
Nine Months Ended
September 30,
(In thousands) 2015
2014 Net income $ 7,571 $ 2,821 Income
tax benefit (3,663) (967) Interest expense, net 24,953 25,351
Depreciation and amortization 31,500 31,004 Restructuring,
severance and other charges1 1,715 627 Other items related to our
credit agreement2 4,265 3,512 Adjusted
EBITDA $ 66,341 $ 62,348
Note:
3) For the nine months ended September 30, 2015, Adjusted
EBITDA represents net income before net interest expense, income
tax expense, depreciation and amortization, plus $1.7 million in
costs associated with restructuring items. For the nine months
ended September 30, 2014, Adjusted EBITDA represents net income
before net interest expense, income tax benefit, depreciation and
amortization, plus $0.6 million in costs associated with
restructuring items. 4) Items related to our credit agreement refer
to amounts utilized in the calculation of financial covenants in
Accuride’s senior credit facility. For the nine months ended
September 30, 2015, items related to our credit agreement consisted
of foreign currency losses and other income or expenses of $4.3
million. For the nine months ended September 30, 2014, items
related to our credit agreement consisted of foreign currency
losses and other income or expenses of $3.5 million.
ACCURIDE CORPORATION
SEGMENT ADJUSTED EBITDA RECONCILIATION
(UNAUDITED)
Three Months Ended September 30,
2015
(In thousands)
Income
(loss)fromOperations
Depreciation
andAmortization
Other
AdjustedEBITDA
Wheels $
13,715
$ 7,469 $ 1,200 $ 22,384
Gunite 5,061 1,157 250 6,468 Brillion Iron Works (3,650) 1,177 30
(2,443) Corporate / Other (7,628) 678
(306) (7,256)
Continuing Operations $ 7,498 $ 10,481 $ 1,174 $ 19,153
Imperial Group (10) 10
— — Consolidated Total $
7,488 $ 10,491 $ 1,174 $
19,153
Three Months Ended September 30,
2014
(In thousands)
Income
(loss)fromOperations
Depreciation
andAmortization
Other
AdjustedEBITDA
Wheels $ 11,847 $ 7,924 $ 1,200 $ 20,971 Gunite 4,149 998 250 5,397
Brillion Iron Works 1,680 1,086 30 2,796 Corporate / Other
(7,632) 484 (858)
(8,006) Continuing Operations $ 10,044 $
10,492 $ 622 $ 21,158 Imperial Group (10)
10 —
— Consolidated Total $ 10,034 $ 10,502 $
622 $ 21,158
Nine Months Ended September 30,
2015
(In
thousands)
Income
(loss)fromOperations
Depreciation
andAmortization
Other
AdjustedEBITDA
Wheels $ 44,372 $ 22,731 $ 3,600 $ 70,703 Gunite 15,140 3,348 750
19,238 Brillion Iron Works (2,924) 3,516 90 682 Corporate / Other
(25,578) 1,874
(578) (24,282) Continuing Operations $
31,010 $ 31,469 $ 3,862 $ 66,341 Imperial Group
(31) 31 —
— Consolidated Total $ 30,979 $ 31,500 $
3,862 $ 66,341
Nine Months Ended September 30, 2014
(In thousands)
Income
(loss)fromOperations
Depreciation
andAmortization
Other
AdjustedEBITDA
Wheels $ 33,446 $ 23,708 $ 3,947 $ 61,101 Gunite 14,670 2,598 750
18,018 Brillion Iron Works 3,444 3,281 90 6,815 Corporate / Other
(22,643) 1,386
(2,329) (23,586) Continuing Operations
$ 28,917 $ 30,973 $ 2,458 $ 62,348 Imperial Group
(31) 31 —
— Consolidated Total $ 28,886 $ 31,004 $
2,458 $ 62,348
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)
September 30,
December 31, (In thousands)
2015 2014 ASSETS CURRENT ASSETS: Cash
and cash equivalents $ 39,125 $ 29,773 Customer and other
receivables 63,735 63,570 Inventories 36,695 43,065 Other current
assets 11,191 13,472 Total current assets 150,746
149,880 PROPERTY, PLANT AND EQUIPMENT, net 203,778 212,183 OTHER
ASSETS: Goodwill and other assets 237,747 236,359
TOTAL $ 592,271 $ 598,422
LIABILITIES AND STOCKHOLDERS’
EQUITY CURRENT LIABILITIES: Accounts payable $ 59,892 $ 56,452
Other current liabilities 31,710 40,619 Total current
liabilities 91,602 97,071 LONG-TERM DEBT 322,022 323,234 OTHER
LIABILITIES 122,963 147,314 STOCKHOLDERS’ EQUITY: Total
stockholders’ equity 55,684 30,803 TOTAL $ 592,271 $
598,422
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151102005512/en/
Accuride CorporationInvestor Relations:Todd Taylor,
812-962-5105ttaylor@accuridecorp.comorMedia Relations:Timothy G.
Weir, APR, 812-962-5128tweir@accuridecorp.com
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