- First Quarter 2016 Results:
- Net loss of $4.7 million, or $0.10 per
share
- Net sales of $160.9 million, down 12.4
percent from the first quarter of 2015
- Adjusted EBITDA of $15.0 million, down
29.6 percent from the first quarter of 2015
- Full-year financial guidance remains
unchanged
Accuride Corporation (NYSE: ACW) – a leading supplier of
components to the North American and European commercial vehicle
industries – today reported financial results for the first quarter
ended March 31, 2016.
"Overall, our first quarter results were within our
expectations,” said Rick Dauch, Accuride President and CEO. “Our
North American facilities continued to operate at world-class
levels producing industry-leading products at superior lead times,
while we carefully managed working capital and cash. This was a
challenging task, as the team dealt with several headwinds
including the onset of lower North American Class 8 truck demand
and ongoing weakness in Brillion’s end markets, as well as the
anticipated results of our Gianetti Ruote business now in the early
stages of its ‘Fix & Grow’ turnaround plan.
“Looking ahead, production in the medium-duty segment is
expected to remain healthy while the trailer segment is projected
to be flat to slightly down compared to 2015. The overall stability
of these two market segments, along with our increased share
position in the aftermarket, should help mitigate some of the 27
percent decline expected in North American Class 8 production this
year. To proactively address the forecasted decline in volumes in
both our commercial vehicle and industrial end markets, we took
aggressive actions in the first quarter to align our cost run-rate
to the anticipated lower volumes by adjusting our plant schedules
and staffing levels. In addition, we reduced corporate headcount,
are aggressively managing corporate spending for 2016 and are
lowering capital expenditures by $5 million. The combined strength
in the North American medium-duty and trailer markets, in
conjunction with these corrective actions, are the primary reason
we are maintaining our key financial guidance ranges for 2016.
Within this context, we will continue to pursue opportunities to
expand share and drive profitable growth in 2016 and beyond."
First Quarter 2016 Results
First quarter 2016 net sales were $160.9 million, down $22.7
million or 12.4 percent, from the same period a year ago. The
decrease was driven by $19.4 million related to the continued
softness in demand at our Brillion business unit, $12.8 million in
pricing related to the pass-through of lower raw material costs and
$4.9 million due to lower demand in North America wheels. Partially
offsetting those decreases were $10.4 million in net sales related
to our majority investment in Gianetti Ruote and $4.0 million from
increased market share at Gunite.
Accuride’s operating income was $2.4 million for the quarter,
compared to operating income of $9.3 million in the first quarter
of 2015. This was primarily due to the incremental margin loss on
the lower demand in our Wheels and Brillion business units and the
planned negative operating margin in the Gianetti business. The
Company reported a net loss from continuing operations attributable
to shareholders of $4.7 million, or a negative $0.10 per share,
compared to a net loss of $0.6 million, or a negative $0.01 per
share, in the first quarter of 2015. First quarter Adjusted EBITDA
was $15.0 million, or 9.3 percent of net sales, compared to $21.3
million, or 11.6 percent of net sales, in the same quarter of
2015.
First Quarter Business Segment Results
Wheels
Wheels segment net sales were $105.4 million, down $3.0 million,
or 2.7 percent, from the same period in 2015. The first quarter of
2016 included $10.4 million in net sales related to our majority
investment in Gianetti that occurred in November 2015. Excluding
the net sales from Gianetti, the Wheels segment net sales were down
$13.4 million, or 12.4 percent, from the same period in 2015. The
decrease in net sales was primarily due to price decreases related
to the pass-through of lower raw material costs and weaker demand
within the Class 8 market segment in North America. The Wheels
segment Adjusted EBITDA was $20.7 million which was a decrease of
$1.5 million, or 6.7 percent, from the first quarter of 2015.
Gunite
Gunite segment net sales of $38.7 million were up $1.0 million,
or 2.6 percent, from the first quarter of 2015. This increase is
attributable primarily to increased market share in aftermarket
brake drums, partially offset by price decreases related to the
pass-through of lower raw material costs. Gunite’s Adjusted EBITDA
was $4.5 million, which was an increase of $0.4 million, or 9.8
percent from the first quarter of 2015.
Brillion Iron Works
Brillion Iron Works segment net sales of $16.8 million were down
$20.8 million, or 55.2 percent, from the first quarter of 2015.
This was primarily due to reduced end market demand from customers
in the oil and gas, agricultural and mining markets. Brillion’s
Adjusted EBITDA was a negative $2.2 million, a decrease of $5.6
million, from the first quarter of 2015. Brillion’s lower cost
structure and recent capital investments have allowed it to earn
additional new business that is scheduled to ramp up in the second
half of 2016 and will help offset continued weakness in end market
demand.
Liquidity and Debt
As of March 31, 2016, total debt was $323.8 million, consisting
of $304.7 million of our outstanding 9.5% senior secured notes, net
of discount and debt issuance costs, $8.7 million in short term
obligations related to our majority interest in Gianetti and $10.3
million drawn on our ABL Credit Facility. As of March 31, 2016,
Accuride had $18.5 million of cash plus $43.3 million in
availability under its ABL Credit Facility for total liquidity of
$61.8 million.
2016 Financial Guidance
As previously communicated, Accuride expects 2016 revenue to be
in the range of $650 million to $700 million, with Adjusted EBITDA
in the range of $65 million to $80 million. Accuride also expects
free cash flow for 2016 to be roughly breakeven. The Company is
basing these expectations for its 2016 guidance on the following
projections for North American commercial vehicle production and
other key assumptions for the year:
- North American Class 8 production
levels in the range of 220,000 to 240,000 units
- North American Class 5-7 production
levels in the range of 220,000 to 240,000 units
- North American Trailer production in
the range of 270,000 to 290,000 units
- European heavy and medium-duty truck
builds in the range of 510,000 to 530,000 units
- Commercial vehicle aftermarket
generally flat versus prior year
- Brillion business unit net sales down
10 percent to 15 percent versus prior year
- Full year consolidation of Gianetti
Ruote
Earnings Conference Call Information
Accuride will host a conference call to discuss the financial
and operational results of its First Quarter Fiscal Year 2016 on
Tuesday, May 3, 2016, beginning at 9:00 a.m. CDT. Analysts and
investors may access the conference call by dialing (877) 543-8122
in the United States, or (615) 247-0091 internationally, and using
participant code 96162725. A live webcast of the call will be
available at the Accuride website Investors section:
www.AccurideCorp.com/investors. A replay will be available from
noon CDT on May 3, 2016 until 11:59 p.m. CDT, May 10, 2016, by
calling (855) 859-2056 in the United States, or (404) 537-3406
internationally, using access code 96162725.
About Accuride Corporation
With headquarters in Evansville, Ind., USA, Accuride Corporation
is a leading supplier of components to the North American and
European commercial vehicle industries. 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 Solutions™,
Gunite®, Gianetti Ruote™ and Brillion™. 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, 2015.
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 March 31,
(Dollars in thousands) 2016 2015
Net sales:
Wheels
$ 105,383 65.5 % $ 108,336 59.0 % Gunite 38,713 24.1 % 37,740 20.5
% Brillion Iron Works 16,846 10.4 % 37,583 20.5 %
Total net sales $ 160,942 100.0 % $ 183,659 100.0 % Gross
Profit $ 15,299 9.5 % $ 20,931 11.4 % Income (loss) from
Operations: Wheels $ 11,150 10.6 % $ 13,252 12.2 % Gunite 3,059 7.9
% 2,741 7.3 % Brillion Iron Works (3,369) (20.0) % 2,196 5.8 %
Corporate / Other (8,422) — (8,861) — Consolidated
Total $ 2,418 1.5 % $ 9,328 5.1 % Adjusted EBITDA: Wheels $
20,731 19.7 % $ 22,229 20.5 % Gunite 4,468 11.5 % 4,076 10.8 %
Brillion Iron Works (2,228) (13.2) % 3,381 9.0 % Corporate / Other
(7,985) — (8,401) — Consolidated Total $
14,986
9.3
% $ 21,285 11.6 %
ACCURIDE CORPORATION AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)(UNAUDITED)
Three Months Ended March 31,
(In thousands except per share data) 2016
2015 NET SALES $ 160,942 $ 183,659 COST OF GOODS SOLD
145,643 162,728 GROSS PROFIT 15,299 20,931 OPERATING
EXPENSES: Selling, general and administrative 12,881
11,603 INCOME FROM OPERATIONS 2,418 9,328 OTHER INCOME (EXPENSE):
Interest expense, net (8,401) (8,350) Other income (loss), net
1,061 (1,172) LOSS BEFORE INCOME TAXES FROM
CONTINUING OPERATIONS (4,922) (194) INCOME TAX PROVISION
(301) (386) LOSS FROM CONTINUING OPERATIONS (5,223) (580)
DISCONTINUED OPERATIONS, NET OF TAX — (8) NET LOSS $
(5,223) $ (588)
NET LOSS ATTRIBUTABLE TO NONCONTROLLING
MINORITY INTEREST
(479) — NET LOSS ATTRIBUTABLE TO STOCKHOLDERS $
(4,744) $ (588) EARNINGS PER SHARE
ATTRIBUTABLE TO STOCKHOLDERS Weighted average common shares
outstanding—basic 48,100 47,822 Basic loss per share-continuing
operations (0.10) (0.01) Basic loss per share-discontinued
operations — — Basic loss per share $ (0.10) $ (0.01)
Weighted average common shares outstanding—diluted 48,100 47,822
Diluted loss per share-continuing operations (0.10) (0.01) Diluted
loss per share-discontinued operations — — Diluted
loss per share $ (0.10) $ (0.01)
ACCURIDE CORPORATIONCONSOLIDATED
ADJUSTED EBITDA(UNAUDITED)
Three Months Ended March 31,
(In thousands) 2016 2015 Net
loss $ (5,223) $ (588) Income tax provision 301 386 Interest
expense, net 8,401 8,350 Depreciation and amortization 11,015
10,596 Noncontrolling interest 355 — Restructuring, severance and
other charges1 584 708 Other items related to our credit agreement2
(447) 1,833 Adjusted EBITDA $ 14,986 $ 21,285
Note:
1) For the three months ended March 31, 2016, Adjusted
EBITDA represents net income before net interest expense, income
tax expense, depreciation and amortization, noncontrolling interest
in subsidiaries, plus $0.6 million in costs associated with
restructuring items. For the three months ended March 31, 2015,
Adjusted EBITDA represents net income before net interest expense,
income tax benefit, depreciation and amortization, plus $0.7
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, 2016, items related
to our credit agreement consisted of foreign currency losses /
(gains) and other income or expenses of $(0.5) million. For the
three months ended March 31, 2015, items related to our credit
agreement consisted of foreign currency losses / (gains) and other
income or expenses of $1.8 million.
ACCURIDE CORPORATIONSEGMENT
ADJUSTED EBITDA RECONCILIATION(UNAUDITED)
Three Months Ended March 31,
2016
(In thousands)
Income
(loss)fromOperations
Depreciation
andAmortization
Other
AdjustedEBITDA
Wheels $ 11,150 $ 8,026 $ 1,555 $ 20,731 Gunite 3,059 1,159 250
4,468 Brillion Iron Works (3,369) 1,111 30 (2,228) Corporate /
Other (8,422) 719 (282) (7,985) Discontinued Operations —
— — — Consolidated Total $ 2,418 $
11,015 $ 1,553 $ 14,986
Three Months
Ended March 31, 2015 (In thousands)
Income
(loss)fromOperations
Depreciation
andAmortization
Other
AdjustedEBITDA
Wheels $ 13,252 $ 7,777 $ 1,200
$
22,229
Gunite 2,741 1,085 250
4,076
Brillion Iron Works 2,196 1,155 30
3,381
Corporate / Other (8,861) 569 (109)
(8,401)
Discontinued Operations (10) 10 —
—
Consolidated Total $ 9,318 $ 10,596 $ 1,371
$
21,285
We define Adjusted EBITDA as our net income or loss before
income tax expense or benefit, interest expense, net, depreciation
and amortization, noncontrolling interest in subsidiaries,
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)
March 31,
December 31, (In thousands) 2016 2015
ASSETS CURRENT ASSETS: Cash and cash equivalents $
18,456 $ 29,759 Customer and other receivables 72,275 65,980
Inventories 40,923 47,792 Other current assets 7,849
8,399 Total current assets 139,503 151,930 PROPERTY, PLANT AND
EQUIPMENT, net 220,472 224,762 OTHER ASSETS: Goodwill and other
assets 226,695 226,927 TOTAL $ 586,670 $ 603,619
LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES:
Accounts payable $ 59,701 $ 71,782 Short term debt obligations
8,689 10,286 Other current liabilities 32,408 39,830
Total current liabilities 100,798 121,898 LONG-TERM DEBT 315,020
304,254 OTHER LIABILITIES 105,618 106,613 STOCKHOLDERS’ EQUITY:
Total stockholders’ equity 65,234 70,854 TOTAL $
586,670 $ 603,619
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160503005471/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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