PLYMOUTH, Mich., Aug. 4, 2015 /PRNewswire/ -- Metaldyne
Performance Group Inc. (NYSE: MPG), a leading provider of
highly-engineered components for use in powertrain and
safety-critical applications for the global light, commercial and
industrial vehicle markets, today reported the following financial
results for its second quarter ended June
28, 2015.
Second Quarter 2015 Financial Highlights:
- Net sales increased 25% to $800.2
million compared to $641.3
million in the second quarter of 2014.
- Gross profit increased 37% to $142.1
million for the quarter compared to $104.1 million the same quarter in 2014.
- Net income was $44.1 million,
resulting in diluted earnings per share of $0.64.
- Adjusted EBITDA increased from prior year 25% to $153.6 million or 19.2% of net sales.
- Adjusted Free Cash Flow, defined as Adjusted EBITDA less
capital expenditures, was $99.3
million, or 12.4% of net sales.
- Dividend declared of $0.09 per
share for shareholders of record as of August 17th, payable August 31, 2015.
- Second quarter voluntary debt prepayment doubled versus prior
quarter to $20 million.
First Six Months 2015 Financial Highlights:
- Net sales increased 32% to $1,565.4
million, compared to $1,181.8
million for the same period in 2014.
- Gross profit increased 44% to $270.6
million for the first six months of 2015, compared to
$187.4 million in the first half of
2014.
- Net income was $76.5 million,
resulting in diluted earnings per share of $1.11.
- Adjusted EBITDA increased 29% to $286.2
million or 18.3% of net sales.
- Adjusted Free Cash Flow, defined as Adjusted EBITDA less
capital expenditures, was $171.2
million or 10.9% of net sales.
- Record new business awards of over $500
million, based upon peak annual net sales.
- Total voluntary debt prepayments of $30
million through the first six months of 2015.
Commenting on the Company's results, George Thanopoulos, Chief Executive Officer of
MPG, stated,
"I'm extremely pleased with our second quarter results,
highlighted by our 19.2% Adjusted EBITDA margin. We also continued
our balanced use of cash by reinvesting in the business, doubling
our voluntary debt prepayment, and returning capital to our
shareholders through the declaration of our second quarter
dividend.
"As we stated, MPG came together to increase profitable growth.
We booked record new business awards in the first six months of
2015, focused on new fuel efficient engines and transmissions.
These awards are scheduled to launch and ramp up over the next five
years, in line with our long-term sales target.
"We are very proud of our accomplishments so far this year and
we remain committed to executing our core value creation and growth
strategy."
Business Outlook:
For fiscal 2015, MPG guidance
remains unchanged:
- Net sales between $3.0 and $3.15
billion
- Adjusted EBITDA between $520 and $560
million
- Capital expenditures between $210 and
$220 million
- Adjusted Free Cash Flow between $310 -
$340 million
Conference Call:
The Company will hold a conference
call to discuss its second quarter and year to date 2015 results
today at 8:00 a.m. ET. A live webcast
of the call may be accessed over the Internet from the Company's
Investor Relations website at investors.mpgdriven.com. Participants
should follow the instructions provided on the website to download
and install the necessary audio applications.
The dial-in phone number for the conference call is:
U.S.
|
1-877-201-0168
|
International
|
1-647-788-4901
|
Conference
ID
|
80620311
|
A live webcast of the conference call and the second quarter
press release will also be available online at
http://investors.mpgdriven.com.
For those unable to participate in the conference call, a replay
will be available from 11:00 a.m. ET
on August 4th until
11:59 p.m. ET on August 11th. The replay dial-in phone
number is:
U.S.
|
1-855-859-2056
|
International
|
1-404-537-3406
|
Passcode
|
80620311
|
About MPG:
MPG is a leading provider of
highly-engineered components for use in powertrain and
safety-critical platforms for the global light, commercial and
industrial vehicle markets. MPG produces these components using
complex metal-forming manufacturing technologies and processes for
a global customer base of vehicle OEMs and Tier I suppliers. MPG's
metal-forming manufacturing technologies and processes include
aluminum die casting, forging, iron casting and powder metal
forming as well as advanced machining and assembly. Headquartered
in Plymouth, Michigan, MPG
has a global footprint spanning 61 locations in 13 countries
across North America, South
America, Europe and Asia with approximately
12,000 employees. For more information, visit
www.mpgdriven.com.
Cautionary Note Regarding Forward-Looking Statements:
The information provided in this press release contains certain
"forward-looking statements" about MPG's financial results and
estimates and business prospects within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements may be identified by words such as "expects," "intends,"
"anticipates," "plans," "project," "believes," "seeks," "targets,"
"forecast," "estimates," "will" or other words of similar meaning
and include, but are not limited to, statements regarding the
outlook for the Company's future business, prospects, and financial
performance; the industry outlook, our backlog and our 2015
business outlook and financial guidance. Forward-looking statements
are based on management's current expectations and assumptions,
which are subject to inherent uncertainties, risks, and changes in
circumstances that are difficult to predict. Actual outcomes and
results may differ materially due to global political, economic,
business, competitive, market, regulatory, and other factors and
risks, including, but not limited to, the following: volatility in
the global economy impacting demand for new vehicles and our
products; a decline in vehicle production levels, particularly with
respect to platforms for which we are a significant supplier, or
the financial distress of any of our major customers; seasonality
in the automotive industry; our significant competition; our
dependence on large-volume customers for current and future sales;
a reduction in outsourcing by our customers, the loss or
discontinuation of material production or programs, or a failure to
secure sufficient alternative programs; our failure to offset
continuing pressure from our customers to reduce our prices; our
inability to realize all of the sales expected from awarded
business or fully recover pre-production costs; our failure to
increase production capacity or over-expanding our production in
times of overcapacity; our reliance on key machinery and tooling to
manufacture components for powertrain and safety-critical systems
that cannot be easily replicated; program launch difficulties; a
disruption in our supply or delivery chain which causes one or more
of our customers to halt production; work stoppages or production
limitations at one or more of our customer's facilities; a
catastrophic loss of one of our key manufacturing facilities;
failure to protect our know-how and intellectual property; the
disruption or harm to our business as a result of any acquisitions
or joint ventures we make; a significant increase in the prices of
raw materials and commodities we use; the damage to or termination
of our relationships with key third-party suppliers; our failure to
maintain our cost structure; the incurrence of significant costs if
we close any of our manufacturing facilities; potential significant
costs at our facility in Sandusky,
Ohio; the failure of or disruptions in our information
technology networks and systems, or the inability to successfully
implement upgrades to our enterprise resource planning systems; the
incurrence of significant costs, liabilities, and obligations as a
result of environmental requirements and other regulatory risks;
extensive and growing governmental regulations; the adverse impact
of climate change and related energy legislation and regulation;
the incurrence of material costs related to legal proceedings; our
inability to recruit and retain key personnel; any failure to
maintain satisfactory labor relations; pension and other
postretirement benefit obligations; risks related to our global
operations; competitive threats posed by global operations and
entering new markets; foreign exchange rate fluctuations; increased
costs and obligations as a result of becoming a public company; the
failure of our internal controls to meet the standards required by
Sarbanes-Oxley; our substantial indebtedness; our inability, or the
inability of our customers or our suppliers, to obtain and maintain
sufficient debt financing, including working capital lines; our
exposure to a number of different tax uncertainties; the mix of
profits and losses in various jurisdictions adversely affecting our
tax rate; disruption from the combination of our operations and
diversion of management's attention; our limited history of working
as a single company and the inability to integrate HHI, Metaldyne,
and Grede successfully and achieve the anticipated benefits.
For the reasons described above, we caution you against relying
on any forward-looking statements, which should also be read in
conjunction with the other cautionary statements that are included
elsewhere in this press release and in our public filings,
including under the heading "Risk Factors" in our filings that we
make from time to time with the Securities and Exchange Commission.
You should not consider any list of such factors to be an
exhaustive statement of all of the risks, uncertainties, or
potentially inaccurate assumptions that could cause our current
expectations or beliefs to change. Further, any forward-looking
statement speaks only as of the date on which it is made, and we
undertake no obligation to update or revise any forward-looking
statement to reflect events or circumstances after the date on
which the statement is made or to reflect the occurrence of
unanticipated events, except as otherwise may be required by
law.
Non-GAAP Financial Measures
Adjusted EBITDA
We define Adjusted EBITDA as net
income (loss) before interest expense, provision for (benefit from)
income taxes and depreciation and amortization, with further
adjustments to reflect the additions and eliminations of certain
income statement items, including (i) gains and losses on foreign
currency and fixed assets and debt transaction expenses, (ii)
stock-based compensation and other non-cash charges, (iii) sponsor
management fees and other income and expense items that we consider
to be not indicative of our ongoing operations, (iv) specified
non-recurring items and (v) other adjustments.
We believe Adjusted EBITDA is used by investors as a
supplemental measure to evaluate the overall operating performance
of companies in our industry. Management uses Adjusted EBITDA (i)
as a measurement to compare our operating performance on a
consistent basis, (ii) to calculate incentive compensation for our
employees, (iii) for planning purposes, including the preparation
of our internal annual operating budget, (iv) to evaluate the
performance and effectiveness of our operational strategies and (v)
to assess compliance with various metrics associated with our
agreements governing our indebtedness. Accordingly, we believe that
Adjusted EBITDA provides useful information to investors and others
in understanding and evaluating our operating performance in the
same manner as our management.
For a reconciliation of Adjusted EBITDA to net income, the most
directly comparable measure determined under U.S. generally
accepted accounting principles ("GAAP"), see "US GAAP
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA AND ADJUSTED FREE
CASH FLOW".
Adjusted Free Cash Flow
We define Adjusted Free Cash
Flow as Adjusted EBITDA less capital expenditures. Capital
expenditures can be found in our consolidated statements of cash
flows as a component of cash flows from investing activities. We
present Adjusted Free Cash Flow because our management considers it
to be a useful, supplemental indicator of our performance. When
measured over time, Adjusted Free Cash Flow provides supplemental
information to investors concerning our results of operations and
our ability to generate cash flows to satisfy mandatory debt
service requirements and make other non-discretionary
expenditures.
For a reconciliation of Adjusted Free Cash Flow to net income,
the most directly comparable GAAP measure, see "US GAAP
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA AND ADJUSTED FREE
CASH FLOW."
Contacts
Investor Relations
Paul Suber
Vice President, Business Development & Investor Relations
investors@mpgdriven.com
248-440-9503
METALDYNE
PERFORMANCE GROUP INC.
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(In millions
except per share data)
|
|
|
June
28, 2015
|
December 31,
2014
|
Assets
|
|
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
$
112.7
|
156.5
|
Receivables,
net:
|
|
|
Trade
|
388.7
|
312.9
|
Other
|
31.0
|
31.9
|
|
|
|
Total receivables,
net
|
419.7
|
344.8
|
Inventories
|
191.0
|
204.8
|
Deferred income
taxes
|
12.0
|
12.4
|
Prepaid
expenses
|
14.3
|
13.0
|
Other
assets
|
14.6
|
14.5
|
|
|
|
Total current
assets
|
764.3
|
746.0
|
Property and
equipment, net
|
754.2
|
750.2
|
Goodwill
|
907.7
|
907.7
|
Amortizable
intangible assets, net
|
743.7
|
778.5
|
Deferred income
taxes, noncurrent
|
2.2
|
1.4
|
Other
assets
|
40.0
|
40.8
|
|
|
|
Total
assets
|
$
3,212.1
|
3,224.6
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
Current
liabilities:
|
|
|
Accounts
payable
|
$
263.8
|
285.5
|
Accrued
compensation
|
46.7
|
50.9
|
Accrued
liabilities
|
72.1
|
79.9
|
Short-term
debt
|
1.5
|
1.6
|
Current maturities,
long-term debt and capital lease obligations
|
15.6
|
16.5
|
|
|
|
Total current
liabilities
|
399.7
|
434.4
|
Long-term debt, less
current maturities
|
1,883.6
|
1,920.3
|
Capital lease
obligations, less current maturities
|
22.4
|
23.4
|
Deferred income
taxes
|
257.8
|
260.7
|
Other long-term
liabilities
|
57.2
|
60.8
|
|
|
|
Total
liabilities
|
2,620.7
|
2,699.6
|
|
|
|
Stockholders'
equity:
|
|
|
Common Stock: par
$0.001, 400,000 authorized, 67,101 issued and
outstanding
|
0.1
|
0.1
|
Paid-in
capital
|
834.7
|
827.3
|
Deficit
|
(199.2)
|
(269.7)
|
Accumulated other
comprehensive loss
|
(46.9)
|
(35.2)
|
|
|
|
Total equity
attributable to stockholders
|
588.7
|
522.5
|
Noncontrolling
interest
|
2.7
|
2.5
|
|
|
|
Total stockholders'
equity
|
591.4
|
525.0
|
|
|
|
Total liabilities and
stockholders' equity
|
$
3,212.1
|
3,224.6
|
|
|
|
|
|
|
|
|
|
METALDYNE
PERFORMANCE GROUP INC.
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In millions
except per share amounts)
|
|
|
Quarter
Ended
|
|
Six Months
Ended
|
|
June 28,
2015
|
|
June 29,
2014
|
|
June 28,
2015
|
|
June 29,
2014
|
|
|
|
|
|
|
|
|
Net sales
|
$ 800.2
|
|
641.3
|
|
1,565.4
|
|
1,181.8
|
Cost of
sales
|
658.1
|
|
537.2
|
|
1,294.8
|
|
994.4
|
|
|
|
|
|
|
|
|
Gross
profit
|
142.1
|
|
104.1
|
|
270.6
|
|
187.4
|
Selling, general and
administrative expenses
|
57.8
|
|
40.4
|
|
114.0
|
|
69.6
|
Acquisition
costs
|
─
|
|
13.0
|
|
─
|
|
13.0
|
|
|
|
|
|
|
|
|
Operating
income
|
84.3
|
|
50.7
|
|
156.6
|
|
104.8
|
Interest expense,
net
|
26.9
|
|
22.6
|
|
54.5
|
|
42.0
|
Loss on debt
extinguishment
|
0.4
|
|
─
|
|
0.4
|
|
0.4
|
Other, net
|
(1.3)
|
|
3.2
|
|
(6.5)
|
|
4.4
|
|
|
|
|
|
|
|
|
Other expense,
net
|
26.0
|
|
25.8
|
|
48.4
|
|
46.7
|
|
|
|
|
|
|
|
|
Income before
tax
|
58.3
|
|
24.9
|
|
108.2
|
|
58.1
|
Income tax
expense
|
14.2
|
|
9.4
|
|
31.5
|
|
19.9
|
|
|
|
|
|
|
|
|
Net income
|
44.1
|
|
15.5
|
|
76.7
|
|
38.2
|
Income attributable
to noncontrolling interest
|
─
|
|
0.1
|
|
0.2
|
|
0.2
|
|
|
|
|
|
|
|
|
Net income
attributable to stockholders
|
$
44.1
|
|
15.4
|
|
76.5
|
|
38.0
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
67.1
|
|
67.1
|
|
67.1
|
|
67.1
|
Cash dividends
declared per share
|
$
─
|
|
─
|
|
0.09
|
|
─
|
Net income per share
attributable to stockholders:
|
|
|
|
|
|
|
|
Basic
|
$
0.66
|
|
0.23
|
|
1.14
|
|
0.57
|
Diluted
|
0.64
|
|
0.22
|
|
1.11
|
|
0.56
|
|
|
|
|
|
|
|
|
|
METALDYNE
PERFORMANCE GROUP INC.
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In
millions)
|
|
|
|
Six Months
Ended
|
|
|
June 28,
2015
|
|
June 29,
2014
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
|
$
76.7
|
|
38.2
|
Adjustments to
reconcile net income to cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
115.2
|
|
90.5
|
Debt fee
amortization
|
|
1.5
|
|
2.5
|
Loss on fixed asset
dispositions
|
|
0.4
|
|
1.2
|
Deferred income
taxes
|
|
(2.9)
|
|
(15.9)
|
Noncash interest
expense
|
|
0.5
|
|
0.9
|
Stock-based
compensation expense
|
|
7.5
|
|
4.6
|
Foreign currency
adjustment
|
|
(3.7)
|
|
(0.1)
|
Other
|
|
5.4
|
|
1.5
|
Changes in assets and
liabilities:
|
|
|
|
|
Receivables,
net
|
|
(77.4)
|
|
(50.5)
|
Inventories
|
|
10.0
|
|
0.9
|
Accounts payable,
accrued liabilities and accrued compensation
|
|
(10.8)
|
|
31.3
|
Other,
current
|
|
(2.4)
|
|
1.8
|
Other,
non-current
|
|
(2.3)
|
|
4.8
|
Net cash provided by
operating activities
|
|
117.7
|
|
111.7
|
Cash flow from
investing activities:
|
|
|
|
|
Capital
expenditures
|
|
(115.0)
|
|
(58.1)
|
Proceeds from sale of
fixed assets
|
|
1.3
|
|
0.3
|
Capitalized patent
costs
|
|
(0.1)
|
|
(0.2)
|
Grede Transaction, net
of cash acquired
|
|
-
|
|
(829.7)
|
Net cash used for
investing activities
|
|
(113.8)
|
|
(887.7)
|
Cash flows from
financing activities:
|
|
|
|
|
Dividends
|
|
(6.0)
|
|
(111.3)
|
Other stock
activity
|
|
-
|
|
(2.4)
|
Proceeds from stock
issuance
|
|
0.1
|
|
258.6
|
Cash settlement of
equity awards
|
|
(0.2)
|
|
-
|
Borrowings of
revolving lines of credit
|
|
14.3
|
|
238.6
|
Payments of revolving
lines of credit
|
|
(14.6)
|
|
(230.5)
|
Proceeds of long-term
debt
|
|
1,326.6
|
|
715.0
|
Payments on long-term
debt
|
|
(1,360.2)
|
|
(11.0)
|
Payment of debt issue
costs
|
|
(0.2)
|
|
(20.2)
|
Other debt,
net
|
|
(1.5)
|
|
(3.8)
|
Payment of offering
related costs
|
|
(0.1)
|
|
-
|
Net cash used for
financing activities
|
|
(41.8)
|
|
833.0
|
Effect of exchange
rates on cash
|
|
(5.9)
|
|
0.8
|
Net increase
(decrease) in cash and cash equivalents
|
|
$
(43.8)
|
|
57.8
|
Cash and cash
equivalents:
|
|
|
|
|
Cash and cash
equivalents, beginning of period
|
|
$
156.5
|
|
68.2
|
Net increase
(decrease) in cash and cash equivalents
|
|
(43.8)
|
|
57.8
|
Cash and cash
equivalents, end of period
|
|
$
112.7
|
|
126.0
|
Supplementary cash
flow information:
|
|
|
|
|
Cash paid for income
taxes, net
|
|
$
33.4
|
|
29.5
|
Cash paid for
interest
|
|
55.8
|
|
27.1
|
Noncash
transactions:
|
|
|
|
|
Capital expenditures
in accounts payables
|
|
19.1
|
|
14.1
|
Dividends declared on
restricted stock awards, not yet vested
|
|
0.1
|
|
-
|
|
|
|
|
|
METALDYNE
PERFORMANCE GROUP INC.
|
US GAAP
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA
|
AND ADJUSTED FREE
CASH FLOW
|
(In
millions)
|
|
|
|
Quarter
Ended
|
|
Six Months
Ended
|
|
|
June 28,
2015
|
|
June 29,
2014
|
|
June 28,
2015
|
|
June 29,
2014
|
Net income
attributable to stockholders
|
|
$ 44.1
|
|
15.4
|
|
76.5
|
|
38.0
|
Income attributable
to noncontrolling interest
|
|
-
|
|
0.1
|
|
0.2
|
|
0.2
|
Net
income
|
|
$ 44.1
|
|
15.5
|
|
76.7
|
|
38.2
|
|
|
|
|
|
|
|
|
|
Addbacks to Arrive
at Unadjusted EBITDA
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
$ 26.9
|
|
22.6
|
|
54.5
|
|
42.0
|
Loss on debt
extinguishment
|
|
0.4
|
|
-
|
|
0.4
|
|
0.3
|
Income tax
expense
|
|
14.2
|
|
9.4
|
|
31.5
|
|
19.9
|
Depreciation and
amortization
|
|
58.8
|
|
47.8
|
|
115.2
|
|
90.5
|
Unadjusted
EBITDA
|
|
$ 144.4
|
|
95.3
|
|
278.3
|
|
190.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to
Arrive at Adjusted EBITDA
|
(Gain) loss on
foreign currency
|
|
$ (3.9)
|
|
1.8
|
|
(8.9)
|
|
1.7
|
Loss on fixed
assets
|
|
0.2
|
|
0.5
|
|
0.4
|
|
1.2
|
Debt transaction
expenses
|
|
1.6
|
|
1.6
|
|
1.7
|
|
2.8
|
Stock-based
compensation expense
|
|
4.2
|
|
3.3
|
|
7.5
|
|
4.6
|
Sponsor management
fee
|
|
-
|
|
1.2
|
|
-
|
|
2.2
|
Non-recurring
acquisition and purchase accounting related items
|
0.4
|
|
18.1
|
|
0.1
|
|
18.1
|
Non-recurring
operational items
|
|
6.7
|
|
1.2
|
|
7.1
|
|
1.2
|
Adjusted
EBITDA
|
|
$ 153.6
|
|
123.0
|
|
286.2
|
|
222.7
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
54.3
|
|
27.3
|
|
115.0
|
|
58.1
|
|
|
|
|
|
|
|
|
|
Adjusted Free Cash
Flow
|
|
$ 99.3
|
|
95.7
|
|
171.2
|
|
164.6
|
METALDYNE
PERFORMANCE GROUP INC.
|
RECONCILATION OF
2015 GUIDANCE
|
OF NET INCOME TO
ADJUSTED EBITDA
|
(In
millions)
|
|
|
|
2015
Guidance
|
|
2015
Guidance
|
|
|
Low End of
Range
|
|
High End of
Range
|
Net income
attributable to
stockholders
|
112.4
|
|
140.3
|
Income attributable
to noncontrolling interest
|
0.4
|
|
0.5
|
Net
income
|
112.8
|
|
140.8
|
|
|
|
|
|
Addbacks to Arrive
at Unadjusted EBITDA
|
|
|
|
Interest expense,
net
|
106.0
|
|
106.0
|
Income tax
expense
|
48.3
|
|
60.3
|
Depreciation and
amortization
|
234.2
|
|
234.2
|
Unadjusted
EBITDA
|
501.3
|
|
541.3
|
|
|
|
|
|
|
|
|
|
|
Adjustments to
Arrive at Adjusted EBITDA
|
|
|
|
Gain on foreign
currency
|
(8.9)
|
|
(8.9)
|
Stock-based
compensation expense
|
16.6
|
|
16.6
|
Non-recurring
operational items and other (1)
|
11.0
|
|
11.0
|
Adjusted
EBITDA
|
520.0
|
|
560.0
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Non-recurring
operational items include impairment charges associated with the
closing of the Berlin, Wisconsin facility, disposed operations,
restructuring costs, debt transaction related expenses and
other.
|
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SOURCE Metaldyne Performance Group Inc.