- Second Quarter 2016 Results:
- Net income of $2.5 million, or $0.05
per share
- Net sales of $164.1 million, down 11.5
percent from the second quarter of 2015
- Adjusted EBITDA of $23.9 million, down
7.6 percent from the second quarter of 2015
- Lowering guidance range for revenue and
narrowing guidance range for Adjusted EBITDA for the full year
Accuride Corporation (NYSE:ACW) – a leading supplier of
components to the North American and European commercial vehicle
industries – today reported financial results for the second
quarter ended June 30, 2016.
“Accuride delivered another solid quarter, as our core Wheels
and Gunite business units continued to perform at world class
operating levels and generate strong profitability,” Accuride
President and CEO Rick Dauch said. “During the second quarter, our
top line was impacted by significantly lower demand at Brillion,
lower Class 8 production and lower pricing related to raw material
pass through mechanisms. Our strong operating performance and cost
reduction initiatives enabled us to offset the revenue declines and
expand EBITDA margins at Wheels and Gunite from 2015 levels.
“Looking at the second half of 2016, we expect to face headwinds
from continued weak demand in Brillion’s end markets
and lower North American Class 8 truck demand,
which should be somewhat offset by healthy Class 5-7
and Trailer market segments. In addition, we expect to
partially offset the impact
of rising steel prices on margins by
continuing to deliver strong operational
performance across our business units.
“Due to these factors, we are lowering our full-year guidance
for revenue to the range of $625 million to $650 million. We are
narrowing our full-year guidance for Adjusted EBITDA to the range
of $65 million to $75 million, as we continue to manage performance
across all of our business units. We’ll continue to take
pre-emptive actions to maintain margins and profitability in order
to achieve break-even or better free cash flow and protect our
liquidity during this period of lower demand," Dauch added.
Second Quarter 2016 Results
Second quarter 2016 net sales were $164.1 million, which was a
decrease of $21.3 million, or 11.5 percent, compared to net sales
of $185.4 million for the three months ended June 30, 2015. The
decrease was driven by $6.3 million related to the continued
softness in demand at our Brillion business unit, $12.0 million in
pricing related to the pass-through of lower raw material costs and
$13.8 million due to lower demand in North American wheels and
brake drums. Partially offsetting those decreases were $10.8
million in net sales related to our majority investment in Gianetti
Ruote.
Accuride’s operating income was $11.5 million, down $2.7
million, compared to operating income of $14.2 million in the
second quarter of 2015. This was primarily due to the incremental
margin loss on the lower product demand which was partially offset
by lower corporate spending. The Company reported net income from
continuing operations attributable to shareholders of $2.5 million,
or $0.05 per share, compared to net income of $6.3 million, or
$0.13 per share, in the second quarter of 2015. Second quarter
Adjusted EBITDA was $23.9 million, or 14.6 percent of net sales,
compared to $25.9 million, or 14.0 percent of net sales, in the
same quarter of 2015.
Second Quarter Business Segment Results
Wheels
Wheels segment net sales were $104.4 million, down $9.9 million,
or 8.7 percent, from the same period in 2015. The second quarter of
2016 included $10.8 million in net sales related to our majority
investment in Gianetti Ruote that occurred in November 2015.
Excluding the net sales from Gianetti Ruote, the Wheels segment net
sales were down $20.7 million, or 18.2 percent, from the same
period in 2015. The decrease is primarily related to the
pass-through of lower material costs of $9.2 million, coupled with
a decrease in production volume from our OEM customers and reduced
demand from our aftermarket customers of $11.5 million. Wheels’
Adjusted EBITDA was $24.7 million which was a decrease of $1.4
million, or 5.3 percent, from the second quarter of 2015. Despite
the decline in net sales, Adjusted EBITDA as a percentage of net
sales improved to 23.7% in the second quarter of 2016.
Gunite
Gunite segment net sales of $43.5 million were down $3.5
million, or 7.4 percent, from the second quarter of 2015. This
decrease is largely attributable to the pass-through of lower
material costs of $1.3 million, coupled with lower OEM production
and slightly less aftermarket demand of $2.2 million. Gunite’s
Adjusted EBITDA was $8.3 million, which was a decrease of $0.4
million, or 4.9 percent from the second quarter of 2015. Despite
the decline in net sales, Adjusted EBITDA as a percentage of net
sales improved to 19.0% in the second quarter of 2016.
Brillion Iron Works
Brillion Iron Works segment net sales of $16.2 million were down
$7.8 million, or 32.6 percent, from the second quarter of 2015.
This was primarily due to lower demand in industrial manufacturing,
agriculture, mining, and oil and gas markets of $6.3 million, as
well as $1.5 million related to the pass-through of lower material
costs during the period. Brillion’s Adjusted EBITDA was a negative
$1.7 million, a decrease of $1.4 million, from the second quarter
of 2015.
Liquidity and Debt
As of June 30, 2016, total debt was $315.5 million, consisting
of $305.3 million of the outstanding 9.5% senior secured notes, net
of discount and debt issuance costs, and $10.2 million in short
term obligations related to the majority interest in Gianetti. As
of June 30, 2016, Accuride had $27.8 million of cash plus $49.9
million in availability under its ABL Credit Facility for total
liquidity of $77.7 million.
2016 Financial Guidance
Accuride expects 2016 revenue to be in the range of $625 million
to $650 million, with Adjusted EBITDA in the range of $65 million
to $75 million. Accuride also expects free cash flow for 2016 to be
roughly breakeven. The Company is basing these expectations for
2016 guidance on the following projections for North American
commercial vehicle production and other key assumptions for the
year:
- North American Class 8 production
levels in the range of 220,000 to 235,000 units
- North American Class 5-7 production
levels in the range of 220,000 to 240,000 units
- North American Trailer production in
the range of 270,000 to 290,000 units
- European heavy- and medium-duty truck
builds in the range of 510,000 to 530,000 units
- Commercial vehicle aftermarket
generally flat versus prior year
- Brillion business unit net sales down
25 percent to 30 percent versus prior year
- Full year consolidation of Gianetti
Ruote
Earnings Conference Call Information
Accuride will host a conference call to discuss the financial
and operational results of its Second Quarter Fiscal Year 2016 on
Tuesday, July 26, 2016, beginning at 9:00 a.m. CDT. Analysts and
investors may access the conference call by dialing (877) 543-8122
in the United States, or (615) 247-0091 internationally, and using
participant code 48742818. A live webcast of the call will be
available at the Accuride website Investors section:
www.AccurideCorp.com/investors. A replay will be available from
noon CDT on July 26, 2016 until 11:59 p.m. CDT, August 2, 2016, by
calling (855) 859-2056 in the United States, or (404) 537-3406
internationally, using access code 48742818.
About Accuride Corporation
With headquarters in Evansville, Ind., USA, Accuride Corporation
is a leading supplier of components to the North American and
European commercial vehicle industries. 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 Solutions™,
Gunite®, Gianetti Ruote™ and Brillion™. 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, 2015.
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) 2016 2015
Net sales: Wheels $ 104,407 63.6 % $
114,356 61.7 % Gunite 43,525 26.5 % 47,006 25.4 % Brillion Iron
Works 16,184 9.9 % 24,018 12.9 % Total net sales $
164,116 100.0 % $ 185,380 100.0 % Gross Profit $ 23,258 14.2
% $ 25,906 14.0 % Income (Loss) from Operations: Wheels $
14,965 14.3 % $ 17,405 15.2 % Gunite 6,827 15.7 % 7,338 15.6 %
Brillion Iron Works (2,824) (17.4) % (1,470) (6.1) % Corporate /
Other (7,477) — (9,089) — Consolidated Total $ 11,491
7.0 % $ 14,184 7.7 % Net Income $ 2,462 1.5 % $ 6,339 3.4 %
Adjusted EBITDA: Wheels $ 24,709 23.7 % $ 26,090 22.8 %
Gunite 8,268 19.0 % 8,694 18.5 % Brillion Iron Works (1,669) (10.3)
% (256) (1.1) % Corporate / Other (7,380) — (8,625) —
Consolidated Total $ 23,928 14.6 %
$ 25,903 14.0 %
Six Months Operating Results
(UNAUDITED)
Six Months Ended June 30,
(Dollars in thousands) 2016 2015
Net sales: Wheels $ 209,790 64.5 % $
222,692 60.3 % Gunite 82,238 25.3 % 84,746 23.0 % Brillion Iron
Works 33,030 10.2 % 61,601 16.7 % Total net sales $
325,058 100.0 % $ 369,039 100.0 % Gross Profit $ 38,557 11.9
% $ 46,837 12.7 % Income (Loss) from Operations: Wheels $
26,115 12.4 % $ 30,657 13.8 % Gunite 9,886 12.0 % 10,079 11.9 %
Brillion Iron Works (6,193) (18.7) % 726 1.2 % Corporate / Other
(15,899) — (17,950) — Consolidated Total $ 13,909 4.3
% $ 23,512 6.4 % Net Income (Loss) $ (2,282) (0.7) % $ 5,751
1.6 % Adjusted EBITDA: Wheels $ 45,439 21.7 % $ 48,319 21.7
% Gunite 12,736 15.5 % 12,770 15.1 % Brillion Iron Works (3,897)
(11.8) % 3,125 5.1 % Corporate / Other (15,365) —
(17,026) — Consolidated Total $ 38,913
12.0 % $ 47,188 12.8 %
ACCURIDE CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
Three Months Ended June 30,
Six Months Ended June 30, (In thousands except per share
data) 2016 2015 2016
2015 NET SALES $ 164,116 $ 185,380 $ 325,058 $
369,039 COST OF GOODS SOLD 140,858 159,474
286,501 322,202 GROSS PROFIT 23,258 25,906 38,557 46,837
OPERATING EXPENSES: Selling, general and administrative
11,767 11,722 24,648 23,325 INCOME FROM
OPERATIONS 11,491 14,184 13,909 23,512 OTHER INCOME (EXPENSE):
Interest expense, net (8,405) (8,354) (16,806) (16,704) Other
income (loss), net (497) (84) 564
(1,256) INCOME (LOSS) BEFORE INCOME TAXES FROM CONTINUING
OPERATIONS 2,589 5,746 (2,333) 5,552 INCOME TAX PROVISION (BENEFIT)
455 (378) 756 8 INCOME (LOSS) FROM
CONTINUING OPERATIONS 2,134 6,124 (3,089) 5,544 DISCONTINUED
OPERATIONS, NET OF TAX — 215 — 207 NET
INCOME (LOSS) 2,134 6,339 (3,089) 5,751 NET LOSS ATTRIBUTABLE TO
NONCONTROLLING INTEREST (328) — (807) —
NET INCOME (LOSS) ATTRIBUTABLE TO STOCKHOLDERS $ 2,462 $ 6,339 $
(2,282) $ 5,751 OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Defined benefit plans and foreign currency (305)
17,566 (1,054) 18,840 COMPREHENSIVE INCOME (LOSS) $
2,157 $ 23,905 $ (3,336) $ 24,591 EARNINGS PER SHARE
ATTRIBUTABLE TO STOCKHOLDERS Weighted average common shares
outstanding—basic 48,307 47,991 48,204 47,907 Basic income (loss)
per share-continuing operations 0.05 0.13 (0.05) 0.12 Basic income
per share-discontinued operations — — —
— Basic income (loss) per share $ 0.05 $ 0.13 $ (0.05) $ 0.12
Weighted average common shares outstanding—diluted 49,189 49,286
48,644 48,554 Diluted income (loss) per share-continuing operations
0.05 0.13 (0.05) 0.12 Diluted income per share-discontinued
operations — — — — Diluted income
(loss) per share $ 0.05 $ 0.13 $ (0.05) $ 0.12
ACCURIDE CORPORATION
CONSOLIDATED ADJUSTED EBITDA
(UNAUDITED)
Three Months Ended June 30,
(In thousands) 2016 2015 Net
income $ 2,134 $ 6,339 Income tax provision (benefit) 455 (378)
Interest expense, net 8,405 8,354 Depreciation and amortization
11,342 10,413 Noncontrolling interest 215 — Restructuring,
severance and other charges1 425 531 Other items related to our
credit agreement2 952 644 Adjusted EBITDA $ 23,928 $
25,903
Note:
1) For the three months ended June 30, 2016, Adjusted
EBITDA represents net income before net interest expense, income
tax expense, depreciation and amortization, noncontrolling interest
in subsidiaries, plus $0.4 million in costs associated with
restructuring items. For the three months ended June 30, 2015,
Adjusted EBITDA represents net income before net interest expense,
income tax benefit, depreciation and amortization, plus $0.5
million in costs associated with restructuring items. 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, 2016, items related
to our credit agreement consisted of foreign currency
losses/(gains) and other income or expenses of $1.0 million. For
the three months ended June 30, 2015, items related to our credit
agreement consisted of foreign currency losses/(gains) and other
income or expenses of $0.6 million.
Six Months Ended June 30,
(In thousands) 2016 2015 Net
income (loss) $ (3,089) $ 5,751 Income tax provision 756 8 Interest
expense, net 16,806 16,704 Depreciation and amortization 22,357
21,009 Noncontrolling interest 569 — Restructuring, severance and
other charges1 1,009 1,239 Other items related to our credit
agreement2 505 2,477 Adjusted EBITDA $ 38,913 $
47,188
Note:
3) For the six months ended June 30, 2016, Adjusted
EBITDA represents net income before net interest expense, income
tax expense, depreciation and amortization, noncontrolling interest
in subsidiaries, plus $1.0 million in costs associated with
restructuring items. For the six months ended June 30, 2015,
Adjusted EBITDA represents net income before net interest expense,
income tax benefit, depreciation and amortization, plus $1.2
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, 2016, items related to
our credit agreement consisted of foreign currency losses/(gains)
and other income or expenses of $0.5 million. For the six months
ended June 30, 2015, items related to our credit agreement
consisted of foreign currency losses/(gains) and other income or
expenses of $2.5 million.
ACCURIDE CORPORATION
SEGMENT ADJUSTED EBITDA
RECONCILIATION
(UNAUDITED)
Three Months Ended June 30,
2016
(In thousands)
Income (loss) from
Operations
Depreciation and
Amortization
Other
Adjusted EBITDA
Wheels $ 14,965 $ 8,329 $ 1,415 $ 24,709 Gunite 6,827 1,191 250
8,268 Brillion Iron Works (2,824) 1,125 30 (1,669) Corporate /
Other (7,477) 685 (588) (7,380) Discontinued Operations —
— — — Consolidated Total $ 11,491 $ 11,330 $
1,107 $ 23,928
Three Months Ended June 30,
2015
(In thousands)
Income (loss) from
Operations
Depreciation and
Amortization
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) Discontinued Operations (11)
11 — — Consolidated Total $ 14,173 $ 10,413 $
1,317 $ 25,903
Six Months Ended June 30, 2016
(In thousands)
Income (loss) from
Operations
Depreciation and
Amortization
Other
Adjusted EBITDA
Wheels $ 26,115 $ 16,355 $ 2,969 $ 45,439 Gunite 9,886 2,350 500
12,736 Brillion Iron Works (6,193) 2,236 60 (3,897) Corporate /
Other (15,899) 1,404 (870) (15,365) Discontinued Operations
— — — — Consolidated Total $ 13,909 $ 22,345 $
2,659 $ 38,913
Six Months Ended June 30, 2015
(In thousands)
Income (loss) from
Operations
Depreciation and
Amortization
Other
Adjusted EBITDA
Wheels $ 30,657 $ 30,856 $ (13,194) $ 48,319 Gunite 10,079 4,567
(1,876) 12,770 Brillion Iron Works 726 9,159 (6,760) 3,125
Corporate / Other (17,950) 2,583 (1,659) (17,026) Discontinued
Operations (21) 21 - - Consolidated
Total $ 23,491 $ 47,186 $ (23,489) $ 47,188
We define Adjusted EBITDA as our net income or loss before
income tax expense or benefit, interest expense, net, depreciation
and amortization, noncontrolling interest in subsidiaries,
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 CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
(UNAUDITED)
June 30,
2016
December 31,2015
(In thousands) ASSETS CURRENT ASSETS: Cash and
cash equivalents $ 27,831 $ 29,759 Customer and other receivables
70,525 65,980 Inventories 39,744 47,792 Other current assets
8,387 8,399 Total current assets 146,487 151,930 PROPERTY,
PLANT AND EQUIPMENT, net 216,211 224,762 OTHER ASSETS: Goodwill and
other assets 225,522 226,927 TOTAL $ 588,220 $
603,619
LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT
LIABILITIES: Accounts payable $ 61,958 $ 71,782 Short term debt
obligations 10,192 10,286 Other current liabilities 39,347
39,830 Total current liabilities 111,497 121,898 LONG-TERM
DEBT 305,354 304,254 OTHER LIABILITIES 103,805 106,613
STOCKHOLDERS’ EQUITY: Total stockholders’ equity 67,564
70,854 TOTAL $ 588,220 $ 603,619
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160726005536/en/
Accuride CorporationMEDIA RELATIONSTimothy G.
Weir, APR, 812-962-5128Director of Public Affairs, Communications
& Marketingtweir@accuridecorp.comorINVESTOR
RELATIONSTodd Taylor, 812-962-5105Vice President and
Treasurerttaylor@accuridecorp.com
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