- Second Quarter 2015 results from
continuing operations included:
- Net sales of $185.4 million, up 2.1
percent year-over-year
- Adjusted EBITDA of $25.9 million, up
11.5 percent year-over-year
- Net Income of $0.13 per share
- Maintaining 2015 earnings guidance
despite reduction in revenue guidance due to Brillion
- Aftermarket demand for aluminum wheels
and Gunite components expected to help offset softer Brillion end
markets
Accuride Corporation (NYSE:ACW) – a leading supplier of
components to the North American commercial vehicle industry –
today reported strong financial results for the second quarter
ended June 30, 2015, reporting increased year-over-year
profitability.
Second Quarter 2015 Results
Second quarter 2015 net sales were $185.4 million, compared with
$181.6 million in the same period in 2014, an increase of 2.1
percent, primarily reflecting the impact of stronger industry
conditions in the Company’s Wheels segment during the quarter.
Accuride’s operating income was $14.2 million for the quarter,
compared to operating income of $12.3 million in the second quarter
of 2014. The Company reported income from continuing operations of
$6.1 million, or $0.13 per share, during the quarter, compared to
income from continuing operations of $5.1 million, or $0.11 per
share, in 2014. Second quarter Adjusted EBITDA increased by 11.5
percent year-over-year to $25.9 million, or 14.0 percent of net
sales, compared to $23.2 million, or 12.8 percent of net sales, in
the same quarter of 2014. As of June 30, 2015, Accuride had $30.8
million of cash plus $59.4 million in availability under its ABL
Credit Facility, for total liquidity of $90.2 million.
Industry Conditions
North American commercial vehicle industry conditions remained
robust in the second quarter, with truck and trailer production
continuing to increase at a healthy pace. Class 8, Class 5-7 and
Trailer production grew by 20.3 percent, 0.5 percent and 13.4
percent, respectively, over 2014. Class 8 and Trailer net orders
continued to moderate in the quarter, but full-year production is
expected to remain strong. The Class 8 backlog remains high at 42
percent above year-ago levels, while the Trailer backlog is 33
percent above last year. As a result, few Class 8 OEM production
slots remain open for the remainder of the year, and many Trailer
makers are completely sold out for 2015. Demand in the medium duty
segment is steady, with backlogs standing 11 percent above year-ago
levels. Fleets are generally optimistic about current industry
conditions, despite some driver-shortage constraints. U.S. freight
tonnage is forecasted to steadily increase over the next several
years, which will continue to drive future demand for trucks and
trailers.
Second Quarter Business Segment Results
Accuride Wheels
Accuride Wheels segment net sales were $114.4 million, up $13.2
million, or 13.1 percent, from the same period in 2014, primarily
due to stronger OEM demand and market share gains in the
aftermarket. Wheels’ Adjusted EBITDA was $26.1 million, an increase
of $5.2 million, or 24.6 percent, from the second quarter of 2014.
Accuride flexed up its expanded aluminum wheel production capacity
to accommodate the increase in volume.
Gunite
Gunite segment net sales of $47.0 million were down $1.3
million, or 2.7 percent, from the second quarter of 2014, due
primarily to lower pricing related to reduced raw material costs
that are passed through to our customers. Gunite’s Adjusted EBITDA
increased by $0.4 million to $8.7 million from $8.3 million in the
second quarter of 2014. As previously announced, Gunite secured and
began serving a multi-year contract as primary aftermarket brake
drum supplier to Daimler Trucks North America. The Company
continues to see increased interest in Gunite’s products, as recent
independent tests validated that Gunite’s 3600A®X brake drum
delivers 15 percent longer life than the nearest North American
competitor and twice the drum life of offshore competitors.
Brillion Iron Works
Brillion Iron Works’ second quarter net sales were $24.0
million, down $8.1 million, or 25.2 percent, from the second
quarter of 2014 on lower customer volumes. Brillion’s Adjusted
EBITDA was a negative $0.3 million, a decrease of $1.9 million,
from the second quarter of 2014. The Company currently expects
Brillion’s 2015 net sales will be 15 percent to 20 percent lower
year-over-year, as compared to its previous guidance of flat
top-line growth. This primarily reflects the impact of global
commodity prices on demand in Brillion's oil and gas, agricultural
and mining end markets.
Liquidity and Debt
As of June 30, 2015, total debt was $316.8 million, consisting
of $306.8 million of our outstanding 9.5% senior secured notes, net
of discount, and a $10.0 million draw on our ABL Credit Facility.
As of June 30, 2015, Accuride had $30.8 million of cash plus $59.4
million in availability under its ABL Credit Facility, for total
liquidity of $90.2 million.
Business and Market Outlook
"Accuride achieved record profitability in the quarter as the
result of Aftermarket share gains for aluminum wheels, and
world-class operating performance and cost containment by Wheels
and Gunite," Accuride President and CEO Rick Dauch said. "Looking
ahead to the second half of 2015, we are confident in our outlook
for continued strong performance from our Wheels and Gunite
businesses. Conditions in the North American commercial vehicle
industry remain robust, with healthy order backlogs and OEM tractor
and trailer build schedules pointing to a near-record year for the
industry. In addition, we are experiencing strong demand for
aluminum wheels and Gunite drums in the aftermarket. Customers are
actively interested in the quality and test-proven superior
durability of our Made-in-the-USA Gunite brake drums. Both trends
enable us to maintain our full-year earnings guidance, despite
weaker end-market demand at Brillion. In our drive to boost
profitability, Accuride continues to actively explore potential
opportunities to expand our business globally, and
opportunistically refinance our debt."
2015 Financial Guidance
Accuride management expects the Company’s 2015 net sales to be
in the range of $700 million to $750 million, and Adjusted EBITDA
to be in the range of $85 million to $95 million. The midpoints of
the Company’s revenue and Adjusted EBITDA ranges represent
increases of 3 percent and 15 percent, respectively, over
Accuride’s 2014 results. The Company has based its 2015 guidance on
the following projections for the North American commercial vehicle
industry: Class 8 production in the range of 310,000 to 330,000
units, Class 5-7 production in the range of 220,000 to 225,000
units and Trailer segment production in the range of 280,000 to
300,000 units. In addition, management expects net sales for the
Brillion business unit to be down by 15 percent to 20 percent
versus 2014 due to continued softness in its oil and gas,
agricultural and mining end markets.
Earnings Conference Call Information
Accuride will host a conference call to discuss the financial
and operational results of its Second Quarter 2015 on Monday, July
27, 2015, beginning at 9:00 a.m. CDT. Analysts and investors may
participate on the conference call by dialing (855) 542-4217 in the
United States, or (412) 455-6081 internationally, and using
participant code 85101918. A live webcast of the call can be
accessed at the Accuride website Investors section:
www.AccurideCorp.com/investors. A replay will be available from
July 27, 2015, at Noon CDT until 10:59 p.m. CDT, August 3, 2015, by
calling (855) 859-2056 in the United States, or (404) 537-3406
internationally, using access code 85101918.
About Accuride Corporation
With headquarters in Evansville, Ind., USA, Accuride Corporation
is a leading supplier of components to the North American
commercial vehicle industry. The company’s products include
commercial vehicle wheels; wheel-end components and assemblies; and
specialty cast-iron components for a range of agricultural,
construction and mining, and oil and gas equipment applications.
The company’s products are marketed under its brand names, which
include Accuride®, Accuride Wheel End SolutionsTM, Gunite®, and
BrillionTM. Accuride’s common stock trades on the New York Stock
Exchange under the ticker symbol ACW. For more information, visit
the Company’s website at http://www.accuridecorp.com.
Forward-Looking Statements
Statements contained in this news release that are not purely
historical are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, including
statements regarding Accuride’s expectations, hopes, beliefs, and
intentions with respect to future results. Such statements are
subject to the impact on Accuride’s business and prospects
generally of, among other factors, market demand in the commercial
vehicle industry, general economic, business and financing
conditions, labor relations, governmental action, competitor
pricing activity, expense volatility and other risks detailed from
time to time in Accuride’s Securities and Exchange Commission
filings, including those described in Item 1A of Accuride’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2014.
Any forward-looking statement reflects only Accuride’s belief at
the time the statement is made. Although Accuride believes that the
expectations reflected in these forward-looking statements are
reasonable, it cannot guarantee its future results, levels of
activity, performance or achievements. Except as required by law,
Accuride undertakes no obligation to update any forward-looking
statements to reflect events or developments after the date of this
news release.
Three Months Operating
Results(UNAUDITED)
Three Months Ended June 30,
(Dollars in thousands) 2015 2014
Net sales: Wheels $ 114,356 61.7 % $ 101,155 55.7 % Gunite
47,006 25.3 % 48,304 26.6 % Brillion 24,018 13.0 %
32,116 17.7 % Total net sales $ 185,380 100.0 % $ 181,575 100.0 %
Gross Profit $ 25,906 14.0 % $ 22,422 12.3 % Income
(loss) from Operations: Wheels $ 17,405 15.2 % $ 11,857 11.7 %
Gunite 7,338 15.6 % 7,243 15.0 % Brillion Iron Works (1,470) (6.1)
% 489 1.5 % Corporate / Other (9,089) — (7,285) —
Consolidated Total $ 14,184 7.7 % $ 12,304 6.8 % Net Income
$ 6,339 3.4 % $ 5,295 2.9 % Adjusted EBITDA: Wheels $ 26,090
22.8 % $ 20,934 20.7 % Gunite 8,694 18.5 % 8,304 17.2 % Brillion
Iron Works (256) (1.1) % 1,605 5.0 % Corporate / Other
(8,625) — (7,609) — Continuing Operations $ 25,903 14.0 % $
23,234 12.8 %
Six Months Operating
Results(UNAUDITED)
Six Months Ended June 30,
(Dollars in thousands) 2015 2014
Net sales: Wheels $ 222,692 60.3 % $ 193,373 55.5 % Gunite
84,746 23.0 % 92,277 26.5 % Brillion 61,601 16.7 %
62,709 18.0 % Total net sales $ 369,039 100.0 % $ 348,359 100.0 %
Gross Profit $ 46,837 12.7 % $ 39,445 11.3 % Income
(loss) from Operations: Wheels $ 30,657 13.8 % $ 21,599 11.2 %
Gunite 10,079 11.9 % 10,521 11.4 % Brillion Iron Works 726 1.2 %
1,764 2.8 % Corporate / Other (17,950) - (15,011) -
Consolidated Total $ 23,512 6.4 % $ 18,873 5.4 % Net Income
$ 5,751 1.6 % $ 1,722 0.5 % Adjusted EBITDA: Wheels $ 48,319
21.7 % $ 40,130 20.8 % Gunite 12,770 15.1 % 12,621 13.7 % Brillion
Iron Works 3,125 5.1 % 4,019 6.4 % Corporate / Other
(17,026) — (15,580) — Continuing Operations $ 47,188 12.8 %
$ 41,190 11.8 %
ACCURIDE CORPORATION AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME(UNAUDITED)
Three Months Ended
June30,
Six Months Ended June
30,
(In thousands except per share data) 2015
2014 2015 2014 NET SALES $
185,380 $ 181,575 $ 369,039 $ 348,359 COST OF GOODS SOLD 159,474
159,153 322,202 308,914 GROSS PROFIT 25,906 22,422 46,837 39,445
OPERATING EXPENSES: Selling, general and administrative 11,722
10,118 23,325 20,572 INCOME FROM OPERATIONS 14,184 12,304 23,512
18,873 OTHER INCOME (EXPENSE): Interest expense, net (8,354)
(8,487) (16,704) (16,907) Other loss, net (84) (169) (1,256) (699)
INCOME BEFORE INCOME TAXES FROM CONTINUING OPERATIONS 5,746 3,648
5,552 1,267 INCOME TAX EXPENSE (BENEFIT) (378) (1,461) 8 (557)
INCOME FROM CONTINUING OPERATIONS 6,124 5,109 5,544 1,824
DISCONTINUED OPERATIONS, NET OF TAX 215 186 207 (102) NET INCOME $
6,339 $ 5,295 $ 5,751 $ 1,722 OTHER COMPREHENSIVE INCOME, NET OF
TAX: Defined benefit plans 17,566 140 18,840 473 COMPREHENSIVE
INCOME $ 23,905 $ 5,435 $ 24,591 $ 2,195 Weighted average common
shares outstanding—basic 47,991 47,737 47,907 47,667 Basic income
per share-continuing operations 0.13 0.11 0.12 0.04 Basic income
per share-discontinued operations — — — — Basic income per share $
0.13 $ 0.11 $ 0.12 $ 0.04 Weighted average common shares
outstanding—diluted 49,286 49,003 48,554 48,299 Diluted income per
share-continuing operations 0.13 0.11 0.12 0.04 Diluted income per
share-discontinued operations — — — — Diluted income per share $
0.13 $ 0.11 $ 0.12 $ 0.04
ACCURIDE CORPORATIONCONSOLIDATED
ADJUSTED EBITDA(UNAUDITED)
Three Months Ended June 30,
(In thousands) 2015 2014 Net
income $ 6,339 $ 5,295 Income tax benefit (378) (1,461) Interest
expense, net 8,354 8,487 Depreciation and amortization 10,413
10,230 Restructuring, severance and other charges1 531 — Other
items related to our credit agreement2 644 683
Adjusted EBITDA $ 25,903 $ 23,234
Note:
1) For the three months ended June 30, 2015, Adjusted EBITDA
represents net income before net interest expense, income tax
expense, depreciation and amortization, plus $0.5 million in costs
associated with restructuring items. For the three months ended
June 30, 2014, Adjusted EBITDA represents net income before net
interest expense, income tax benefit, depreciation and
amortization. 2) Items related to our credit agreement refer to
amounts utilized in the calculation of financial covenants in
Accuride’s senior credit facility. For the three months ended June
30, 2015, items related to our credit agreement consisted of
foreign currency losses and other income or expenses of $0.6
million. For the three months ended June 30, 2014, items related to
our credit agreement consisted of foreign currency losses and other
income or expenses of $0.7 million.
Six Months Ended June 30,
(In thousands) 2015 2014 Net
income $ 5,751 $ 1,722 Income tax expense (benefit) 8 (557)
Interest expense, net 16,704 16,907 Depreciation and amortization
21,009 20,502 Restructuring, severance and other charges1 1,239 627
Other items related to our credit agreement2 2,477
1,989 Adjusted EBITDA $ 47,188 $ 41,190
Note:
3) For the six months ended June 30, 2015, Adjusted EBITDA
represents net income before net interest expense, income tax
expense, depreciation and amortization, plus $1.2 million in costs
associated with restructuring items. For the six months ended June
30, 2014, Adjusted EBITDA represents net income before net interest
expense, income tax benefit, depreciation and amortization, plus
$0.6 million in costs associated with restructuring items. 4) Items
related to our credit agreement refer to amounts utilized in the
calculation of financial covenants in Accuride’s senior credit
facility. For the six months ended June 30, 2015, items related to
our credit agreement consisted of foreign currency losses and other
income or expenses of $2.5 million. For the six months ended June
30, 2014, items related to our credit agreement consisted of
foreign currency losses and other income or expenses of $2.0
million.
ACCURIDE CORPORATIONSEGMENT
ADJUSTED EBITDA RECONCILIATION(UNAUDITED)
Three Months Ended June 30,
2015
(In thousands)
Income
(loss)fromOperations
Depreciation
andAmortization
Other
Adjusted EBITDA
Wheels $ 17,405 $ 7,485 $ 1,200 $ 26,090 Gunite 7,338 1,106 250
8,694 Brillion Iron Works (1,470) 1,184 30 (256) Corporate / Other
(9,089) 627 (163) (8,625) Continuing
Operations $ 14,184 $ 10,402 $ 1,317 $ 25,903 Imperial Group
(11) 11 — — Consolidated Total $ 14,173
$ 10,413 $ 1,317 $ 25,903
Three Months Ended June 30,
2014
(In thousands)
Income
(loss)fromOperations
Depreciation
andAmortization
Other
Adjusted EBITDA
Wheels $ 11,857 $ 7,877 $ 1,200 $ 20,934 Gunite 7,243 811 250 8,304
Brillion Iron Works 489 1,086 30 1,605 Corporate / Other
(7,285) 446 (770) (7,609) Continuing
Operations $ 12,304 $ 10,220 $ 710 $ 23,234 Imperial Group
(10) 10 — — Consolidated Total $ 12,294
$ 10,230 $ 710 $ 23,234
Six Months Ended June 30, 2015
(In thousands)
Income
(loss)fromOperations
Depreciation
andAmortization
Other
Adjusted EBITDA
Wheels $ 30,657 $ 15,262 $ 2,400 $ 48,319 Gunite 10,079 2,191 500
12,770 Brillion Iron Works 726 2,339 60 3,125 Corporate / Other
(17,950) 1,196 (272) (17,026)
Continuing Operations $ 23,512 $ 20,988 $ 2,688 $ 47,188
Imperial Group (21) 21 — — Consolidated
Total $ 23,491 $ 21,009 $ 2,688 $ 47,188
Six Months Ended June 30, 2014
(In thousands)
Income
(loss)fromOperations
Depreciation
andAmortization
Other
Adjusted EBITDA
Wheels $ 21,599 $ 15,784 $ 2,747 $ 40,130 Gunite 10,521 1,600 500
12,621 Brillion Iron Works 1,764 2,195 60 4,019 Corporate / Other
(15,011) 902 (1,471) (15,580)
Continuing Operations $ 18,873 $ 20,481 $ 1,836 $ 41,190
Imperial Group (21) 21 — — Consolidated
Total $ 18,852 $ 20,502 $ 1,836 $ 41,190
We define Adjusted EBITDA as our net income or loss before
income tax expense or benefit, interest expense, net, depreciation
and amortization, restructuring, severance, and other charges,
impairment, and currency losses, net. Adjusted EBITDA has been
included because we believe that it is useful for us and our
investors to measure our ability to provide cash flows to meet debt
service. Adjusted EBITDA should not be considered an alternative to
net income (loss) or other traditional indicators of operating
performance and cash flows determined in accordance with accounting
principles generally accepted in the United States (“GAAP”). We
present the table of Adjusted EBITDA because covenants in the
agreements governing our material indebtedness contain ratios based
on this measure on a quarterly basis. While Adjusted EBITDA is used
as a measure of liquidity and the ability to meet debt service
requirements, it is not necessarily comparable to other similarly
titled captions of other companies due to differences in methods of
calculations.
ACCURIDE CORPORATIONCONDENSED
CONSOLIDATED BALANCE SHEETS(UNAUDITED)
June 30,
December 31, (In thousands) 2015
2014 ASSETS CURRENT ASSETS: Cash and cash
equivalents $ 30,847 $ 29,773 Customer and other receivables 77,691
63,570 Inventories 40,724 43,065 Other current assets 13,586
13,472 Total current assets 162,848 149,880 PROPERTY, PLANT
AND EQUIPMENT, net 206,174 212,183 OTHER ASSETS: Goodwill and other
assets 234,678 236,359 TOTAL $ 603,700 $ 598,422
LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES:
Accounts payable $ 65,573 $ 56,452 Other current liabilities
38,172 40,619 Total current liabilities 103,745 97,071
LONG-TERM DEBT 316,760 323,234 OTHER LIABILITIES 126,763 147,314
STOCKHOLDERS’ EQUITY: Total stockholders’ equity 56,432
30,803 TOTAL $ 603,700 $ 598,422
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150727005347/en/
Accuride CorporationInvestor Relations:Todd Taylor,
812-962-5105ttaylor@accuridecorp.comorMedia Relations:Timothy G.
Weir, APR, 812-962-5128tweir@accuridecorp.com
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