American Axle & Manufacturing Holdings, Inc. (AAM), which is traded as AXL on the NYSE, today reported its financial results for the fourth quarter and full year 2014.
Fourth Quarter 2014 Results
- Fourth quarter 2014 sales of $939.5 million, up approximately 13% on a year-over-year basis
- Non-GM sales grew over 13% on a year-over-year basis to $317.2 million
- Gross profit of $111.2 million, or 11.8% of sales
- Net income of $13.2 million, or $0.17 per share
- AAM’s quarterly results reflect a non-cash charge of $35.5 million related to a voluntary one-time lump sum cash payment to certain eligible terminated vested participants in our U.S. pension plans (2014 Pension Payout Offer)
- Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, excluding the impact of the non-cash charge related to the 2014 Pension Payout Offer) of $135.1 million, or 14.4% of sales
- Free cash flow (net cash provided by operating activities less capital expenditures net of proceeds from the sale of property, plant and equipment and government grants) of $39.2 million
Full Year 2014 Results
- Full year 2014 sales of $3.7 billion, up approximately 15% on a year-over-year basis
- Non-GM sales grew nearly 30% on a year-over-year basis to $1.2 billion
- Gross profit of $522.8 million, or 14.1% of sales
- Net income of $143.0 million, or $1.85 per share
- Adjusted EBITDA of $512.0 million, or 13.9% of sales
- Free cash flow of $123.1 million
AAM’s net income in the fourth quarter of 2014 was $13.2 million, or $0.17 per share. In the fourth quarter of 2014, AAM’s results reflect the impact of a non-cash charge of $35.5 million related to the 2014 Pension Payout Offer. This compares to net income of $29.8 million, or $0.39 per share, in the fourth quarter of 2013.
In the fourth quarter of 2013, AAM’s results reflect the impact of $25.6 million of debt refinancing and redemption costs.
For the full year 2014, AAM’s net income was of $143.0 million, or $1.85 per share. This compares to net income of $94.5 million, or $1.23 per share in 2013.
On a full year basis in 2013, AAM incurred $36.8 million of debt refinancing and redemption costs and $5.8 million of other special items.
“2014 was a very successful year for AAM. AAM’s sales growth outpaced the industry in 2014 and our financial performance was highlighted by improved profitability and a positive inflection in cash flow generation,” said AAM’s Chairman, President and Chief Executive Officer, David C. Dauch. “As we look to the future, we remain focused on delivering our plan to sustain strong free cash flow performance while leveraging AAM’s technology leadership to develop innovative, market driven products to achieve profitable growth and business diversification.”
Net sales in the fourth quarter of 2014 increased 13% to $939.5 million as compared to $831.3 million in the fourth quarter of 2013. Non-GM sales grew 13.2% on a year-over-year basis to $317.2 million in the fourth quarter of 2014 as compared to $280.1 million in the fourth quarter 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 fourth quarter of 2014, AAM’s content-per-vehicle was $1,697 as compared to $1,579 in the fourth quarter of 2013. For the full year 2014, AAM’s content-per-vehicle was $1,667 as compared to $1,550 in 2013.
Net sales for the full year 2014 increased by 15.2% to $3.70 billion as compared to $3.21 billion in 2013. Non-GM sales grew 29.5% on a year-over-year basis to $1.2 billion in 2014 as compared to $926.7 million in 2013.
AAM’s gross profit in the fourth quarter of 2014 was $111.2 million, or 11.8% of sales. For the full year 2014, AAM’s gross profit was $522.8 million, or 14.1% of sales.
In the fourth quarter of 2014, AAM’s operating income was $38.6 million, or 4.1% of sales. For the full year 2014, AAM’s operating income was $267.6 million, or 7.2% of sales.
AAM’s SG&A spending in the fourth quarter of 2014 was $72.6 million, or 7.7% of sales, as compared to $60.5 million, or 7.3% of sales, in the fourth quarter of 2013. AAM’s R&D spending in the fourth quarter of 2014 was $27.3 million as compared to $24.0 million in the fourth quarter of 2013. Approximately $4.3 million of the non-cash charge for the 2014 Pension Payout Offer was recognized in SG&A.
AAM’s SG&A spending for the full year 2014 was $255.2 million, or 6.9% of sales, as compared to $238.4 million, or 7.4% of sales, for the full year 2013. AAM’s R&D spending for the full year 2014 was $103.9 million as compared to $103.4 million in 2013.
Other income in the fourth quarter of 2014 was $6.4 million as compared to a loss of $0.5 million in the fourth quarter of 2013. For the full year 2014, other income was $6.9 million as compared to a loss of $1.9 million in 2013. The primary components of other income in 2013 and 2014 are foreign exchange gains and losses and earnings from our unconsolidated Hefei (China) joint venture.
In the fourth quarter of 2014, AAM’s net income was $13.2 million, or 1.4% of sales. Diluted earnings per share were $0.17 per share in the fourth quarter of 2014. For the full year 2014, AAM’s net income was $143.0 million, or 3.9% of sales. Diluted earnings per share were $1.85 per share for the full year 2014.
AAM defines EBITDA to be earnings before interest, taxes, depreciation and amortization. For 2014, adjusted EBITDA is defined as EBITDA excluding the impact of the non-cash charge related to the 2014 Pension Payout Offer.
In the fourth quarter of 2014, AAM’s Adjusted EBITDA was $135.1 million or 14.4% of sales. For the full year 2014, AAM’s Adjusted EBITDA was $512.0 million, or 13.9% of sales.
AAM defines free cash flow to be net cash provided by (or used in) operating activities less capital expenditures net of proceeds from the sale of property, plant and equipment and government grants.
Net cash provided by operating activities for the full year 2014 was $318.4 million. Capital expenditures net of proceeds from the sale of property, plant and equipment and government grants, for the full year 2014 was $195.3 million. Reflecting the impact of this activity, AAM generated positive free cash flow of $123.1 million for the full year 2014.
A conference call to review AAM’s fourth quarter and full year 2014 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 2:00 p.m. ET on February 23, 2015 until 5:00 p.m. ET March 2, 2015 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 34605151.
