Achieves record annual sales, record non-GM sales, and record gross profit in 2015
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 2015.
Fourth Quarter 2015 Results
- Fourth quarter 2015 sales of $958.4 million
- Non-GM sales of $323.5 million
- Gross profit of $159.8 million, or 16.7% of sales
- Net income of $62.9 million, or $0.81 per share
- Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, excluding the impact of $0.8 million of debt refinancing and redemption costs) of $137.5 million, or 14.3% 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 from government grants) of $53.3 million
Full Year 2015 Results
- Full year 2015 sales of $3.9 billion
- Non-GM sales of $1.3 billion
- Gross profit of $635.4 million, or 16.3% of sales
- Net income of $235.6 million, or $3.02 per share
- Adjusted EBITDA of $571.1 million, or 14.6% of sales
- Free cash flow of $189.5 million
AAM’s net income in the fourth quarter of 2015 was $62.9 million, or $0.81 per share. This compares to net income of $13.2 million, or $0.17 per share, in the fourth quarter of 2014.
In the fourth quarter of 2015, AAM’s results reflect the impact of $0.8 million of debt refinancing and redemption costs. These results also reflect the impact of a favorable adjustment to income tax expense of $11.5 million related to the resolution of transfer pricing audits in Mexico.
In the fourth quarter of 2014, AAM’s results reflect the impact of 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).
For the full year 2015, AAM’s net income was of $235.6 million, or $3.02 per share. This compares to net income of $143.0 million, or $1.85 per share in 2014.
“AAM had an outstanding year in 2015. On the strength of North American light vehicle production volumes and our solid operational performance, AAM achieved record sales and record gross profit for the year. We also made measurable progress in diversifying our business and improving our capital structure,” said AAM’s Chairman & Chief Executive Officer, David C. Dauch. “As we look ahead to 2016 and beyond, we remain focused on advancing our technology leadership in order to capitalize on major industry trends and drive profitable growth and business diversification.”
Net sales in the fourth quarter of 2015 were $958.4 million as compared to $939.5 million in the fourth quarter of 2014. Non-GM sales in the fourth quarter of 2015 were $323.5 million as compared to $317.2 million in the fourth quarter of 2014.
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 2015, AAM’s content-per-vehicle was $1,645 as compared to $1,697 in the fourth quarter of 2014. For the full year 2015, AAM’s content-per-vehicle was $1,645 as compared to $1,667 in 2014.
Net sales for the full year 2015 increased by 5.6% to $3.9 billion as compared to $3.7 billion in 2014. Non-GM sales grew by 9.8% on a year-over-year basis to $1.3 billion in 2015 as compared to $1.2 billion in 2014.
AAM’s gross profit in the fourth quarter of 2015 was $159.8 million as compared to $111.2 million in the fourth quarter of 2014. Gross margin was 16.7% in the fourth quarter of 2015 as compared to 11.8% in the fourth quarter of 2014. Approximately $31.2 million of the non-cash charge for the 2014 Pension Payout Offer was recorded in gross profit for the fourth quarter and the full year of 2014.
AAM’s gross profit for the full year 2015 increased 21.5% on a year-over-year basis to $635.4 million as compared to $522.8 million for the full year of 2014. Gross margin was 16.3% for the full year of 2015 as compared to 14.1% for the full year of 2014.
AAM’s SG&A spending in the fourth quarter of 2015 was $72.7 million, or 7.6% of sales, as compared to $72.6 million, or 7.7% of sales, in the fourth quarter of 2014. AAM’s R&D spending in the fourth quarter of 2015 was $31.3 million as compared to $27.3 million in the fourth quarter of 2014. Approximately $4.3 million of the non-cash charge for the 2014 Pension Payout Offer was recorded in SG&A for the fourth quarter and the full year of 2014.
AAM’s SG&A spending for the full year 2015 was $277.3 million, or 7.1% of sales, as compared to $255.2 million, or 6.9% of sales, for the full year 2014. AAM’s R&D spending for the full year 2015 was $113.9 million as compared to $103.9 million in 2014.
Other income in the fourth quarter of 2015 was $1.1 million as compared to $6.4 million in the fourth quarter of 2014. For the full year 2015, other income was $12.0 million as compared to $6.9 million in 2014. The primary components of other income in 2015 and 2014 are foreign exchange gains and losses and earnings from our unconsolidated Hefei (China) joint venture.
In the fourth quarter of 2015, AAM’s net income was $62.9 million, or $0.81 per share. This compares to net income of $13.2 million, or $0.17 per share, in the fourth quarter of 2014. For the full year 2015, AAM’s net income was $235.6 million, or $3.02 per share, as compared to $143.0 million, or $1.85 per share, for the full year of 2014.
AAM defines EBITDA to be earnings before interest, income taxes, depreciation and amortization. For 2015, Adjusted EBITDA is defined as EBITDA excluding the impact of debt refinancing and redemption costs. 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 2015, AAM’s Adjusted EBITDA was $137.5 million, or 14.3% of sales, as compared to $135.1 million, or 14.4% of sales, in the fourth quarter of 2014. For the full year 2015, AAM’s Adjusted EBITDA was $571.1 million, or 14.6% of sales, as compared to $512.0 million, or 13.9% of sales, for the full year of 2014.
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.
Net cash provided by operating activities for the full year 2015 was $377.6 million. Capital expenditures net of proceeds from the sale of property, plant and equipment and from government grants, for the full year 2015 was $188.1 million. Reflecting the impact of this activity, AAM’s full year 2015 free cash flow increased by 53.9% to $189.5 million as compared to $123.1 million for the full year of 2014.
A conference call to review AAM’s fourth quarter and full year 2015 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 12, 2016 until 11:59 p.m. ET February 19, 2016 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 34605757.
