Quarterly net income increases by more than 38% on a year-over-year basis to $60.9 million, or $0.78 per share
American Axle & Manufacturing Holdings, Inc. (AAM), which is traded as AXL on the NYSE, today reported its financial results for the third quarter 2015.
Third Quarter 2015 Results
- Third quarter 2015 sales of $971.6 million, up 2.2% on a year-over-year basis
- Non-GM sales grew 8.4% on a year-over-year basis to $321.6 million
- Gross profit of $158.3 million, or 16.3% of sales
- Operating income of $92.8 million, or 9.5% of sales
- Net income of $60.9 million, or $0.78 per share
- EBITDA (earnings before interest, taxes, depreciation and amortization) of $149.2 million, or 15.4% of sales
AAM’s net income in the third quarter of 2015 was $60.9 million, or $0.78 per share. This compares to a net income of $44.0 million, or $0.57 per share in the third quarter of 2014.
“AAM’s financial results in the third quarter of 2015 reflect strong operating cash flow generation and profitability driven by solid production volumes across many of our major product programs supporting the North American light vehicle segment and continued operational execution,” said AAM’s Chairman & Chief Executive Officer, David C. Dauch. “As we progress towards our 2015 financial targets, our team remains committed to improving our capital structure while leveraging AAM’s technology leadership to develop innovative solutions that will allow us to profitably grow while exploring strategic growth opportunities.”
Net sales in the third quarter of 2015 increased 2.2% on a year-over-year basis to $971.6 million as compared to $950.8 million in the third quarter of 2014. Non-GM sales were up 8.4% in the quarter to $321.6 million as compared to $296.8 million in the third quarter of 2014.
AAM’s net sales in the first nine months of 2015 increased by 6.8% to $2.94 billion as compared to $2.76 billion in the first nine months of 2014. Non-GM sales in the first nine months of 2015 increased 12.6% on a year-over-year basis to $993.6 million as compared to $882.7 million in the first nine months 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 third quarter of 2015, AAM’s content-per-vehicle was $1,622 as compared to $1,676 in the third quarter of 2014 and $1,637 in the second quarter of 2015.
AAM’s gross profit in the third quarter of 2015 increased 12.5% on a year-over-year basis to $158.3 million as compared to $140.7 million in the third quarter of 2014. Gross margin was 16.3% in the third quarter of 2015 as compared to 14.8% in the third quarter of 2014.
AAM’s gross profit for the first nine months of 2015 increased 15.5% on a year-over-year basis to $475.6 million as compared to $411.6 million in the first nine months of 2014. Gross margin was 16.1% in the first nine months of 2015 as compared to 14.9% in the first nine months of 2014.
AAM’s SG&A expense in the third quarter of 2015 was $65.5 million, or 6.7% of sales, as compared to $64.0 million, or 6.7% of sales, in the third quarter of 2014. AAM’s R&D expense in the third quarter of 2015 was $25.8 million as compared to $26.4 million in the third quarter of 2014.
In the first nine months of 2015, AAM’s SG&A expense was $204.6 million, or 6.9% of sales, as compared to $182.6 million, or 6.6% of sales, for the first nine months of 2014. AAM’s R&D expense increased $6.0 million in the first nine months of 2015 on a year-over-year basis to $82.6 million compared to $76.6 million in the first nine months of 2014.
In the third quarter of 2015, AAM’s operating income increased 21.0% to $92.8 million as compared to $76.7 million in the third quarter of 2014. Operating margin was 9.5% in the third quarter of 2015 as compared to 8.1% in the third quarter of 2014.
AAM’s operating income in the first nine months of 2015 increased by $42.0 million to $271.0 million as compared to $229.0 million in the first nine months of 2014. Operating margin was 9.2% in the first nine months of 2015 as compared to 8.3% in the first nine months of 2014.
In the third quarter of 2015, AAM’s net income was $60.9 million or $0.78 per share. This compares to net income of $44.0 million or $0.57 per share in the third quarter of 2014. AAM’s net income in the first nine months of 2015 was $172.7 million, or $2.21 per share as compared to $129.8 million, or $1.68 per share in the first nine months of 2014.
AAM defines EBITDA to be earnings before interest, income taxes, depreciation and amortization. In the third quarter of 2015, AAM’s EBITDA was $149.2 million, or 15.4% of sales, as compared to $127.7 million, or 13.4% of sales, in the third quarter of 2014. In the first nine months of 2015, AAM’s EBITDA was $433.6 million, or 14.7% of sales, as compared to $376.9 million, or 13.7% of sales, in the first nine months 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.
Net cash provided by operating activities for the third quarter of 2015 was $113.8 million. Capital spending, net of proceeds from the sale of property, plant and equipment for the third quarter of 2015 was $40.6 million. Reflecting the impact of this activity, AAM generated free cash flow of $73.2 million for the third quarter of 2015.
Net cash provided by operating activities for the first nine months of 2015 was $268.1 million. Capital spending, net of proceeds from the sale of property, plant and equipment for the first nine months of 2015 was $131.9 million. Reflecting the impact of this activity, AAM generated free cash flow of $136.2 million in the first nine months of 2015.
A conference call to review AAM’s third quarter 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 October 30, 2015 until 5:00 p.m. ET November 6, 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 34605624.
