American Axle & Manufacturing Holdings, Inc. (AAM), which is traded as AXL on the NYSE, today reported its financial results for the third quarter 2014.
Third Quarter 2014 Results
- Third quarter 2014 sales of $950.8 million, up 15.8% on a year-over-year basis
- Non-GM sales grew 26.5% on a year-over-year basis to $296.8 million
- Gross profit of $149.1 million, or 15.7% of sales
- Operating income of $85.1 million, or 9.0% of sales
- Net income of $48.6 million, or $0.63 per share
- EBITDA (earnings before interest, taxes, depreciation and amortization) of $136.1 million or approximately 14.3% of sales
AAM’s net income in the third quarter of 2014 was $48.6 million, or $0.63 per share. This compares to a net income of $31.6 million, or $0.41 per share in the third quarter of 2013.
“In the third quarter of 2014, AAM’s financial results were highlighted by strong cash flow and solid profitability driven by continued sales growth and improvements in operational stability and productivity. Based on our progress through the first three quarters of the year, AAM is on track to deliver more than $100 million of positive free cash flow for the full year 2014,” said David C. Dauch, AAM’s Chairman, President & Chief Executive Officer. “AAM’s improved free cash flow execution is helping to reduce our balance sheet leverage and is strengthening our ability to invest in the continued development of innovative new product, process and systems technologies designed to provide our customers with measurable gains in fuel efficiency and power density, as well as improved safety, ride and handling performance.”
Net sales in the third quarter of 2014 increased approximately 15.8% on a year-over-year basis to $950.8 million as compared to $820.8 million in the third quarter of 2013. Non-GM sales were up 26.5% in the quarter to $296.8 million as compared to $234.7 million in the third quarter of 2013.
AAM’s net sales in the first nine months of 2014 increased by 16% to $2.76 billion as compared to $2.38 billion in the first nine months of 2013. Non-GM sales in the first nine months of 2014 increased approximately 36.5% on a year-over-year basis to $882.7 million as compared to $646.6 million in the first nine months of 2013.
AAM’s content-per-vehicle is measured by the dollar value of its product sales supporting our customers’ North American light truck and SUV programs. In the third quarter of 2014, AAM’s content-per-vehicle increased to $1,676 as compared to $1,560 in the third quarter of 2013 and $1,640 in the second quarter of 2014.
AAM’s gross profit in the third quarter of 2014 increased 19.0% on a year-over-year basis to $149.1 million as compared to $125.3 million in the third quarter of 2013. Gross margin was 15.7% in the third quarter of 2014 as compared to 15.3% in the third quarter of 2013.
AAM’s gross profit for the first nine months of 2014 increased 19.4% on a year-over-year basis to $420.0 million as compared to $351.8 million in the first nine months of 2013. Gross margin was 15.2% in the first nine months of 2014 as compared to 14.8% in the first nine months of 2013.
AAM’s SG&A expense in the third quarter of 2014 was $64.0 million, or 6.7% of sales, as compared to $57.8 million, or 7.0% of sales, in the third quarter of 2013. AAM’s R&D expense in the third quarter of 2014 was $26.4 million as compared to $23.6 million in the third quarter of 2013.
In the first nine months of 2014, AAM’s SG&A expense was $182.6 million, or 6.6% of sales, as compared to $177.9 million, or 7.5% of sales, for the first nine months of 2013. AAM’s R&D expense decreased $2.8 million in the first nine months of 2014 on a year-over-year basis to $76.6 million compared to $79.4 million in the first nine months of 2013.
In the third quarter of 2014, AAM’s operating income increased 26.1% to $85.1 million as compared to $67.5 million in the third quarter of 2013. Operating margin was 9.0% in the third quarter of 2014 as compared to 8.2% in the third quarter of 2013.
AAM’s operating income in the first nine months of 2014 increased by 63.5 million to $237.4 million as compared to $173.9 million in the first nine months of 2013. Operating margin was 8.6% in the first nine months of 2014 as compared to 7.3% in the first nine months of 2013.
In the third quarter of 2014, AAM’s net income was $48.6 million or $0.63 per share. This compares to net income of $31.6 million or $0.41 per share in the third quarter of 2013.
AAM defines EBITDA to be earnings before interest, taxes, depreciation and amortization. In the third quarter of 2014, AAM’s EBITDA was $136.1 million or 14.3% of sales. In the first nine months of 2014, AAM’s EBITDA was $385.3 million or 14.0% of sales.
AAM defines free cash flow to be net cash provided by (used in) operating activities less capital expenditures net of proceeds from the sale of property, plant and equipment and the sale-leaseback of equipment.
Net cash provided by operating activities for the third quarter of 2014 was $149.2 million. Capital spending, net of proceeds from the sale of property, plant and equipment and the sale-leaseback of equipment, for the third quarter of 2014 was $52.3 million. Reflecting the impact of this activity, AAM generated free cash flow of $96.9 million for the third quarter of 2014.
Net cash provided by operating activities for the first nine months of 2014 was $231.6 million. Capital spending, net of proceeds from the sale of property, plant and equipment and the sale-leaseback of equipment, for the first nine months of 2014 was $147.7 million. Reflecting the impact of this activity, AAM generated free cash flow of $83.9 million in the first nine months of 2014.
