DETROIT, Aug. 5 /PRNewswire-FirstCall/ -- American Axle &
Manufacturing Holdings, Inc. (AAM), which is traded as AXL on the
NYSE, today reported its financial results for the second quarter
of 2009. Second Quarter 2009 Results -- Second quarter sales of
$245.6 million -- AAM's quarterly results reflect the adverse
impact of the extended production shutdowns by GM and Chrysler; AAM
estimates the reduction in sales and operating income resulting
from these shutdowns to be approximately $203.6 million and
approximately $65.7 million (or $1.18 per share), respectively --
Special charges and other non-recurring operating costs of $191.8
million, or $3.46 per share; these charges were principally
non-cash in the period and primarily related to asset impairments,
hourly and salaried workforce reductions (including attrition
programs and related statutory benefits) and the acceleration of
Buydown Program (BDP) expense for UAW-represented associates at our
original U.S. locations -- Net loss of $288.6 million, or $5.20 per
share -- 57% year-over-year decline in total light truck production
volumes as compared to the second quarter of 2008 --
Content-per-vehicle of $1,401, approximately 7% higher as compared
to the second quarter of 2008 -- Non-GM sales of $57.6 million, or
approximately 23.5% of total net sales AAM's results in the second
quarter were a net loss of $288.6 million or $5.20 per share. This
compares to a net loss of $644.3 million or $11.89 per share in the
second quarter of 2008. AAM's results in the second quarter of 2009
were adversely impacted by the extended production shutdowns of GM
and Chrysler. AAM estimates the reduction in sales and operating
income resulting from these shutdowns to be approximately $203.6
million and approximately $65.7 million (or $1.18 per share),
respectively. In the second quarter of 2009, AAM incurred special
charges, asset impairments and non-recurring operating costs of
$191.8 million, or $3.46 per share. These charges were principally
non-cash in the period and primarily related to asset impairments,
hourly and salaried workforce reductions (including attrition
programs and related statutory benefits) and the acceleration of
BDP expense for UAW-represented associates at AAM's Detroit,
Michigan; Three Rivers, Michigan; and Cheektowaga, New York
manufacturing facilities. Asset impairments totaled $172.8 million
in the second quarter of 2009, including indirect inventory
obsolescence and idled leased assets. These asset impairments
primarily related to the impact of new capacity rationalization
actions taken by GM and Chrysler as a result of their bankruptcy
filings and subsequent reorganization plans, including extended
production shutdowns for many of the product programs AAM currently
supports. These asset impairments also contemplated changes in
AAM's operating plans, including the idling and consolidation of a
significant portion of the Detroit Manufacturing Complex, which
were made necessary by the extended production shutdowns and other
program delays and sourcing decisions taken by our customers in the
second quarter of 2009. The acceleration of BDP expense of $22.5
million in the second quarter of 2009 was triggered by associates
voluntarily electing to accelerate AAM's remaining BDP obligations
and terminate employment, as well as revised estimates of the
number of associates that are expected to be permanently idled
throughout the term of the 2008 labor agreements. In the second
quarter of 2008, AAM recorded $575.6 million, or $10.62 per share,
of special charges, asset impairments and non-recurring operating
costs, related to hourly and salaried workforce reductions,
valuation allowances on deferred tax assets and other special
charges, primarily relating to costs incurred in connection with
plant closings, including costs to redeploy machinery and
equipment. "The extended production shutdowns by GM and Chrysler
adversely impacted AAM's results for the second quarter of 2009.
This required AAM to accelerate and expand restructuring actions to
transition to new, reduced levels of customer demand and market
requirements," said AAM's Co-Founder, Chairman of the Board and
Chief Executive Officer, Richard E. Dauch. "Amid the increasingly
challenging global market conditions we are experiencing this year,
AAM remains focused on managing what we can control. We have nearly
completed the comprehensive restructuring, resizing and recovery of
our business by realigning AAM's global manufacturing capacity and
reducing AAM's operating break-even level. As a result of these
difficult, but necessary, restructuring actions, we are achieving
permanent and transformational improvements in AAM's cost structure
and operating flexibility. This will position AAM to return to
profitability as part of a viable and sustainable future for our
company." Net sales in the second quarter of 2009 were $245.6
million as compared to $490.5 million in the second quarter of
2008. AAM estimates that approximately $203.6 million of this
decrease was attributable to the extended production shutdowns by
GM and Chrysler. Customer production volumes for the North American
light truck and SUV programs AAM currently supports for GM and
Chrysler were down approximately 57% in the second quarter of 2009
as compared to the second quarter of 2008. Non-GM sales represented
approximately 23.5% of total sales in the second quarter of 2009.
AAM's content-per-vehicle is measured by the dollar value of its
product sales supporting GM's North American light truck and SUV
programs and Chrysler's heavy duty Dodge Ram pickup trucks. For the
second quarter of 2009, AAM's content-per-vehicle increased
approximately 7% to $1,401 as compared to $1,312 in the second
quarter of 2008. Net sales in the first half of 2009 were $648.0
million as compared to $1.1 billion in the first half of 2008.
AAM's operating loss in the first half of 2009 was $277.3 million
as compared to an operating loss of $609.5 million for the first
half of 2008. For the first half of 2009, AAM estimates the
reduction in sales and operating income resulting from the extended
production shutdowns by GM and Chrysler to be $203.6 million and
$65.7 million ($1.18 per share), respectively. AAM's SG&A
spending for the second quarter of 2009 was $45.5 million as
compared to $44.9 million in the second quarter of 2008. In the
first half of 2009, AAM's SG&A spending was $89.3 million as
compared to $94.3 million in the first half of 2008. AAM's R&D
spending for the first half of 2009 was approximately $35.7 million
as compared to $42.1 million in the first half of 2008. AAM defines
free cash flow to be net cash provided by (or used in) operating
activities less capital expenditures net of proceeds from the sales
of equipment and dividends paid. Net cash used in operating
activities in first half of 2009 was $26.4 million as compared to
$75.9 million in the first half of 2008. Capital spending and
deposits for the acquisition of property and equipment, net of
proceeds from the sale of equipment in the first half of 2009 was
$80.5 million as compared to $64.6 million in the first half of
2008. Reflecting the impact of this activity, AAM's free cash flow
was a use of $106.9 million in the first half of 2009. Included in
the first half of 2009 cash flow results, AAM paid $54.4 million
for special charges and related costs, which primarily related to
hourly and salaried attrition programs and related statutory
benefits. In the first half of 2008, AAM's free cash flow was a use
of $156.7 million. A conference call to review AAM's second quarter
2009 results is scheduled today at 10:00 a.m. ET. Interested
participants may listen to the live conference call by logging onto
AAM's investor web site at http://investor.aam.com/ or calling
(877) 278-1452 from the United States or (973) 200-3383 from
outside the United States. A replay will be available from 5:00
p.m. ET on August 5, 2009 until 5:00 p.m. ET August 12, 2009 by
dialing (800) 642-1687 from the United States or (706) 645-9291
from outside the United States. When prompted, callers should enter
conference reservation number 15908578. Non-GAAP Financial
Information In addition to the results reported in accordance with
accounting principles generally accepted in the United States of
America (GAAP) included within this press release, AAM has provided
certain information, which includes non-GAAP financial measures.
Such information is reconciled to its closest GAAP measure in
accordance with the Securities and Exchange Commission rules and is
included in the attached supplemental data. Management believes
that these non-GAAP financial measures are useful to both
management and its stockholders in their analysis of the Company's
business and operating performance. Management also uses this
information for operational planning and decision-making purposes.
Non-GAAP financial measures are not and should not be considered a
substitute for any GAAP measure. Additionally, non-GAAP financial
measures as presented by AAM may not be comparable to similarly
titled measures reported by other companies. AAM is a world leader
in the manufacture, engineering, design and validation of driveline
and drivetrain systems and related components and modules, chassis
systems and metal-formed products for trucks, sport utility
vehicles, passenger cars and crossover utility vehicles. In
addition to locations in the United States (Michigan, New York,
Ohio and Indiana), AAM also has offices or facilities in Brazil,
China, Germany, India, Japan, Luxembourg, Mexico, Poland, South
Korea, Thailand and the United Kingdom. Certain statements
contained in this press release are forward-looking statements
related to the Company's plans, projections, strategies or future
performance. Such statements, made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995,
are based on our current expectations, are inherently uncertain,
are subject to risks and should be viewed with caution. Actual
results and experience may differ materially as a result of many
factors, including but not limited to: when post-bankruptcy General
Motors Corporation (New GM) and post-bankruptcy Chrysler (New
Chrysler) resume production, production levels, production type of
vehicles and whether we are a supplier for those vehicles; to what
extent New GM assumes our contracts with "Old" GM and contract
terms; our ability to maintain sufficient liquidity in light of the
recent extended production shutdowns by GM and Chrysler; the terms
of our contractual relationships with New GM and New Chrysler
post-bankruptcy; the ability of GM to comply with the terms of the
Secured Term Loan Facility provided by the U. S. Treasury and any
other applicable requirements of the Troubled Asset Relief Program
(TARP); the impact on our business of requirements imposed on, or
actions taken by, any of our customers in response to TARP or
similar programs; global economic conditions; availability of
financing for working capital, capital expenditures, R&D or
other general corporate purposes, including our ability to comply
with financial covenants and commercial agreements and/or negotiate
waivers/amendments to such agreements; our customers'(other than GM
and Chrysler) and suppliers' availability of financing for working
capital, capital expenditures, R&D and other general corporate
purposes; reduced purchases of our products by New GM, New Chrysler
or other customers; reduced demand for our customers' products
(particularly light trucks and SUVs produced by GM and Chrysler);
our ability to achieve cost reductions through ongoing
restructuring actions; additional restructuring actions that may
occur; our ability to achieve the level of cost reductions required
to sustain global cost competitiveness; our ability to maintain
satisfactory labor relations and avoid future work stoppages; our
suppliers' ability to maintain satisfactory labor relations and
avoid work stoppages; our customers' and their suppliers' ability
to maintain satisfactory labor relations and avoid work stoppages;
our ability to implement improvements in our U.S. labor cost
structure; supply shortages or price increases in raw materials,
utilities or other operating supplies; our ability or our
customers' and suppliers' ability to successfully launch new
product programs on a timely basis; our ability to realize the
expected revenues from our new and incremental business backlog;
our ability to attract new customers and programs for new products;
our ability to develop and produce new products that reflect market
demand; lower-than-anticipated market acceptance of new or existing
products; our ability to respond to changes in technology,
increased competition or pricing pressures; continued or increased
high prices for or reduced availability of fuel; adverse changes in
laws, government regulations or market conditions affecting our
products or our customers' products (such as the Corporate Average
Fuel Economy regulations); adverse changes in economic conditions
or the political stability of our principal markets (particularly
North America, Europe, South America and Asia); liabilities arising
from warranty claims, product liability and legal proceedings to
which we are or may become a party; changes in liabilities arising
from pension and other postretirement benefit obligations; risks of
noncompliance with environmental regulations or risks of
environmental issues that could result in unforeseen costs at our
facilities; our ability to attract and retain key associates; other
unanticipated events and conditions that may hinder our ability to
compete. It is not possible to foresee or identify all such factors
and we make no commitment to update any forward-looking statement
or to disclose any facts, events or circumstances after the date
hereof that may affect the accuracy of any forward-looking
statement. For more information... Christopher M. Son David Tworek
Director, Investor Relations and Manager, Communications Corporate
Communications (313) 758-4883 (313) 758-4814 Or visit the AAM
website at http://www.aam.com/. AMERICAN AXLE & MANUFACTURING
HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) Three months ended Six months ended June 30, June 30,
------------------------ ------------------------ 2009 2008 2009
2008 ---------- ---------- ---------- ---------- (In millions,
except (In millions, except per share data) per share data) Net
sales $245.6 $490.5 $648.0 $1,078.1 Cost of goods sold 460.7
1,018.4 836.0 1,593.3 ---------- ---------- ---------- ----------
Gross loss (215.1) (527.9) (188.0) (515.2) Selling, general and
administrative expenses 45.5 44.9 89.3 94.3 ---------- ----------
---------- ---------- Operating loss (260.6) (572.8) (277.3)
(609.5) Interest expense (19.7) (15.1) (40.1) (30.4) Investment
income 1.0 1.6 2.0 4.2 Other income (expense), net (2.9) 1.1 (3.7)
1.6 ---------- ---------- ---------- ---------- Loss before income
taxes (282.2) (585.2) (319.1) (634.1) Income tax expense 6.5 59.1
2.3 37.2 ---------- ---------- ---------- ---------- Net loss
(288.7) (644.3) (321.4) (671.3) Add: Net loss attributable to
noncontrolling interest 0.1 - 0.1 - ---------- ----------
---------- ---------- Net loss attributable to AAM $(288.6)
$(644.3) $(321.3) $(671.3) ========== ========== ==========
========== Diluted earnings (loss) per share $(5.20) $(11.89)
$(5.79) $(12.45) ========== ========== ========== ==========
Diluted shares outstanding 55.5 54.2 55.5 53.9 ==========
========== ========== ========== AMERICAN AXLE & MANUFACTURING
HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
June 30, December 31, 2009 2008 ------------ ------------ (In
millions) ASSETS ------ Current assets Cash and cash equivalents
$272.4 $198.8 Short-term investments 11.1 77.1 Accounts receivable,
net 59.6 186.9 AAM/GM agreement receivable - 60.0 Inventories, net
103.2 111.4 Prepaid expenses and other 47.3 61.1 ------------
------------ Total current assets 493.6 695.3 Property, plant and
equipment, net 940.3 1,064.2 GM postretirement cost sharing asset
221.7 221.2 Goodwill 147.8 147.8 Other assets and deferred charges
117.2 119.2 ------------ ------------ Total assets $1,920.6
$2,247.7 ============ ============ LIABILITIES AND STOCKHOLDERS'
DEFICIT ------------------------------------- Current liabilities
Current portion of long-term debt $1,248.0 $- Accounts payable
135.4 250.9 Accrued expenses and other 229.4 266.8 ------------
------------ Total current liabilities 1,612.8 517.7 Long-term debt
21.5 1,139.9 Deferred revenue 155.9 178.2 Postretirement benefits
and other long-term liabilities 866.4 847.4 ------------
------------ Total liabilities 2,656.6 2,683.2 Stockholders'
deficit (736.0) (435.5) ------------ ------------ Total liabilities
and stockholders' deficit $1,920.6 $2,247.7 ============
============ AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three
months ended Six months ended June 30, June 30,
------------------------ ------------------------ 2009 2008 2009
2008 ---------- ---------- ---------- ---------- (In millions) (In
millions) Operating activities Net loss $(288.6) $(644.3) $(321.3)
$(671.3) Depreciation and amortization 36.6 56.0 72.5 112.6 Other
246.9 504.1 222.4 482.8 ---------- ---------- ---------- ----------
Net cash flow used in operating activities (5.1) (84.2) (26.4)
(75.9) Purchases of property, plant & equipment (35.3) (33.6)
(79.6) (66.9) Payment of deposits for acquisition of property and
equipment (0.9) - (1.4) - Investment in joint venture - - (10.2) -
Proceeds from sales of assets - 2.3 0.5 2.3 Redemption of short-
term investments 7.1 - 66.0 - ---------- ---------- ----------
---------- Net cash flow used in investing activities (29.1) (31.3)
(24.7) (64.6) Net increase in debt 168.6 3.1 123.6 7.9 Debt
issuance costs (2.7) - (2.7) - Repurchase of treasury stock (0.1) -
(0.1) (0.1) Employee stock option exercises, including tax benefit
- 0.6 - 0.9 Dividends paid - (8.2) - (16.2) ---------- ----------
---------- ---------- Net cash flow provided by (used in) financing
activities 165.8 (4.5) 120.8 (7.5) Effect of exchange rate changes
on cash 3.7 0.5 3.9 0.5 ---------- ---------- ---------- ----------
Net increase (decrease) in cash and cash equivalents 135.3 (119.5)
73.6 (147.5) Cash and cash equivalents at beginning of period 137.1
315.6 198.8 343.6 ---------- ---------- ---------- ---------- Cash
and cash equivalents at end of period $272.4 $196.1 $272.4 $196.1
========== ========== ========== ========== AMERICAN AXLE &
MANUFACTURING HOLDINGS, INC. SUPPLEMENTAL DATA (Unaudited) The
supplemental data presented below is a reconciliation of certain
financial measures which is intended to facilitate analysis of
American Axle & Manufacturing Holdings, Inc. business and
operating performance. Earnings (loss) before interest expense,
income taxes and depreciation and amortization (EBITDA)(a) Three
months ended Six months ended June 30, June 30,
------------------------ ------------------------ 2009 2008 2009
2008 ---------- ---------- ---------- ---------- (In millions) (In
millions) Net loss $(288.6) $(644.3) $(321.3) $(671.3) Interest
expense 19.7 15.1 40.1 30.4 Income taxes 6.5 59.1 2.3 37.2
Depreciation and amortization 36.6 56.0 72.5 112.6 ----------
---------- ---------- ---------- EBITDA $(225.8) $(514.1) $(206.4)
$(491.1) ========== ========== ========== ========== Net debt(b) to
capital June 30, December 31, 2009 2008 ------------ ------------
(In millions, except percentages) Total debt $1,269.5 $1,139.9
Less: cash and cash equivalents 272.4 198.8 ------------
------------ Net debt at end of period 997.1 941.1 Stockholders'
deficit (736.0) (435.5) ------------ ------------ Total invested
capital at end of period $261.1 $505.6 ============ ============
Net debt to capital(c) 381.9% 186.1% ============ ============ Net
Operating Cash Flow and Free Cash Flow(d) Three months ended Six
months ended June 30, June 30, ------------------------
------------------------ 2009 2008 2009 2008 ---------- ----------
---------- ---------- (In millions) (In millions) Net cash used in
operating activities $(5.1) $(84.2) $(26.4) $(75.9) Less: Purchases
of property, plant & equipment and proceeds from sale of
equipment (35.3) (31.3) (79.1) (64.6) Payment of deposits for
acquisition of property and equipment (0.9) - (1.4) - ----------
---------- ---------- ---------- Net operating cash flow (41.3)
(115.5) (106.9) (140.5) Less: dividends paid - (8.2) - (16.2)
---------- ---------- ---------- ---------- Free cash flow $(41.3)
$(123.7) $(106.9) $(156.7) ========== ========== ==========
========== (a) We believe that EBITDA is a meaningful measure of
performance as it is commonly utilized by management and investors
to analyze operating performance and entity valuation. Our
management, the investment community and the banking institutions
routinely use EBITDA, together with other measures, to measure our
operating performance relative to other Tier 1 automotive
suppliers. EBITDA should not be construed as income from
operations, net income or cash flow from operating activities as
determined under GAAP. Other companies may calculate EBITDA
differently. (b) Net debt is equal to total debt less cash and cash
equivalents. (c) Net debt to capital is equal to net debt divided
by the sum of stockholders' deficit and net debt. We believe that
net debt to capital is a meaningful measure of financial condition
as it is commonly utilized by management, investors and creditors
to assess relative capital structure risk. Other companies may
calculate net debt to capital differently. (d) We define net
operating cash flow as net cash provided by operating activities
less purchases of property and equipment net of proceeds from sales
of assets. Free cash flow is defined as net operating cash flow
less dividends paid. We believe net operating cash flow and free
cash flow are meaningful measures as they are commonly utilized by
management and investors to assess our ability to generate cash
flow from business operations to repay debt and return capital to
our stockholders. Net operating cash flow is also a key metric used
in our calculation of incentive compensation. Other companies may
calculate net operating cash flow and free cash flow differently.
DATASOURCE: American Axle & Manufacturing Holdings, Inc.
CONTACT: Christopher M. Son, Director, Investor Relations and
Corporate Communications, +1-313-758-4814, , or David Tworek,
Manager, Communications, +1-313-758-4883, , both of American Axle
& Manufacturing Holdings, Inc. Web Site: http://www.aam.com/
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