American Axle & Manufacturing Holdings, Inc. (AAM), (AXL) today reported its financial results for the fourth quarter and full year 2016 and confirmed AAM’s full year 2017 outlook.
Fourth Quarter 2016 Results
- Fourth quarter 2016 sales of $946.5 million
- Gross profit of $176.1 million, or 18.6% of sales
- Net income of $46.9 million, or 5.0% of sales
- Diluted earnings per share of $0.59
- Net cash provided by operating activities of $116.6 million
- Adjusted EBITDA of $148.2 million, or 15.7% of sales
- Adjusted earnings per share of $0.78
- Adjusted free cash flow of $62.8 million
Full Year 2016 Results
- Full year 2016 sales of $3.95 billion
- Gross profit of $726.1 million, or 18.4% of sales
- Net income of $240.7 million, or 6.1% of sales
- Diluted earnings per share of $3.06
- Net cash provided by operating activities $407.6 million
- Adjusted EBITDA of $619.4 million, or 15.7% of sales
- Adjusted earnings per share of $3.30
- Adjusted free cash flow of $198.6 million
AAM’s net income in the fourth quarter of 2016 was $46.9 million, or $0.59 per share. This compares to net income of $62.9 million, or $0.81 per share, in the fourth quarter of 2015.
For the full year 2016, AAM’s net income was $240.7 million, or $3.06 per share. This compares to net income of $235.6 million, or $3.02 per share in 2015.
AAM defines Adjusted earnings per share to be diluted earnings per share excluding the impact of restructuring and acquisition-related costs, debt refinancing and redemption costs and non-recurring items, including the tax effect thereon.
Adjusted earnings per share in the fourth quarter of 2016 was $0.78 compared to $0.67 in the fourth quarter of 2015. For the full year 2016, AAM’s Adjusted earnings per share was $3.30 compared to $2.88 in 2015.
“In 2016, AAM achieved another year of record sales and gross profit, strong global operational performance, and new business wins that will further drive sales diversification,” said AAM’s Chairman & Chief Executive Officer, David C. Dauch. “As we look towards what we expect to be a transformational year for AAM in 2017, we will be laser focused on our commitment to provide our customers with world-class quality, operational excellence and technology leadership.”
Net sales in the fourth quarter of 2016 were $946.5 million as compared to $958.4 million in the fourth quarter of 2015. Non-GM sales in the fourth quarter of 2016 were $323.0 million as compared to $323.5 million in the fourth quarter of 2015.
Net sales for the full year 2016 were $3.95 billion as compared to $3.90 billion in 2015. Non-GM sales for the full year of 2016 were $1.29 billion as compared to $1.32 billion for the full year of 2015.
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 fourth quarter of 2016, AAM’s content-per-vehicle was $1,634 as compared to $1,645 in the fourth quarter of 2015. For the full year 2016, AAM’s content-per-vehicle was $1,617 as compared to $1,645 in 2015.
AAM’s gross profit in the fourth quarter of 2016 was $176.1 million as compared to $159.8 million in the fourth quarter of 2015. Gross margin was 18.6% in the fourth quarter of 2016 as compared to 16.7% in the fourth quarter of 2015.
AAM’s gross profit for the full year 2016 increased 14.3% on a year-over-year basis to $726.1 million as compared to $635.4 million for the full year of 2015. Gross margin was 18.4% for the full year of 2016 as compared to 16.3% for the full year of 2015.
AAM’s selling, general, and administrative (SG&A) expenses in the fourth quarter of 2016 was $84.4 million, or 8.9% of sales, as compared to $72.7 million, or 7.6% of sales, in the fourth quarter of 2015.
AAM’s SG&A spending for the full year 2016 was $319.2 million, or 8.1% of sales, as compared to $277.3 million, or 7.1% of sales, for the full year 2015.
AAM’s research and development (R&D) spending in the fourth quarter of 2016 was $37.5 million as compared to $31.3 million in the fourth quarter of 2015. AAM’s R&D spending for the full year 2016 was $139.8 million as compared to $113.9 million in 2015.
AAM defines EBITDA to be earnings before interest expense, income taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA excluding the impact of restructuring and acquisition-related costs, debt refinancing and redemption costs and non-recurring items.
In the fourth quarter of 2016, AAM’s Adjusted EBITDA was $148.2 million, or 15.7% of sales, as compared to $137.5 million, or 14.3% of sales, in the fourth quarter of 2015. For the full year 2016, AAM’s Adjusted EBITDA was $619.4 million, or 15.7% of sales, as compared to $571.1 million, or 14.6% of sales, for the full year of 2015.
AAM defines free cash flow to be net cash provided by operating activities less capital expenditures net of proceeds from the sale of property, plant and equipment and from government grants. Adjusted free cash flow is defined as free cash flow excluding the impact of cash payments for restructuring and acquisition-related costs.
Net cash provided by operating activities for the full year 2016 was $407.6 million. Capital expenditures, net of proceeds from the sale of property, plant and equipment and from government grants for the full year 2016 was $218.5 million. Cash payments for restructuring and acquisition-related costs were $9.5 million. Reflecting the impact of this activity, AAM’s Adjusted free cash flow for the full year of 2016 was $198.6 million as compared to $189.5 million for the full year of 2015.
AAM’s Full Year 2017 Outlook
AAM is confirming its stand-alone full year 2017 outlook:
- AAM is targeting sales in the range of $4.1 billion to $4.2 billion in 2017. This sales projection is based on the anticipated launch schedule of programs in AAM’s new and incremental business backlog and the assumption that U.S. Seasonally Adjusted Annual Rate of sales (“SAAR”) will be approximately 17.5 million light vehicle units in 2017.
- AAM is targeting an Adjusted EBITDA margin in the range of 15.5% to 16.0% of sales in 2017.
- AAM is targeting Adjusted free cash flow in the range of $175 million to $200 million in 2017.
- AAM is targeting full year capital spending in the range of 6.5% to 7.0% of sales in 2017.
Fourth Quarter and Full-year 2016 Conference Call Information
A conference call to review AAM’s fourth quarter and full year 2016 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 (855) 681-2072 from the United States or (973) 200-3383 from outside the United States. A replay will be available from 1:00 p.m. ET on February 10, 2017 until 11:59 p.m. ET February 17, 2017 by dialing (855) 859-2056 from the United States or (404) 537-3406 from outside the United States. When prompted, callers should enter conference reservation number 87956021.
