Generates Strong Cash Flow
DETROIT, Nov. 3, 2023
/PRNewswire/ -- American Axle & Manufacturing Holdings, Inc.
(AAM), (NYSE: AXL) today reported its financial results for the
third quarter 2023.
Third Quarter 2023 Results
- Sales of $1.55 billion
- Net loss of $(17.4) million, or
(1.1)% of sales
- Adjusted EBITDA of $156.8
million, or 10.1% of sales
- Diluted loss per share of $(0.15); Adjusted loss per share of $(0.11)
- Net cash provided by operating activities of $178.3 million; Adjusted free cash flow of
$135.8 million
"AAM's third quarter financial performance reflected greater
than anticipated downtime at key customers, operational
inefficiencies and the UAW work stoppage," said AAM's Chairman and
Chief Executive Officer, David C.
Dauch. "Despite these challenges, AAM generated strong free
cash flow during the quarter and continues to focus on cementing
its leadership in electric propulsion technology for future
profitable growth."
AAM's sales in the third quarter of 2023 were $1.55 billion as compared to $1.54 billion in the third quarter of 2022. Sales
for the third quarter of 2023 were favorably impacted by volume and
mix. The UAW work stoppage impacted sales by approximately
$15 million in the
quarter.
AAM's net loss in the third quarter of 2023 was $(17.4) million, or $(0.15) per share, as compared to net income of
$26.5 million, or $0.22 per share in the third quarter of
2022.
Adjusted loss per share in the third quarter of 2023 was
$(0.11) compared to Adjusted earnings
per share of $0.27 in the third
quarter of 2022. Higher product warranty expense impacted
adjusted EPS by approximately $0.09
in the third quarter of 2023. The UAW work stoppage impacted
adjusted EPS by approximately $0.03
in the quarter.
In the third quarter of 2023, Adjusted EBITDA was $156.8 million, or 10.1% of sales, as compared to
$198.4 million, or 12.9% of sales, in
the third quarter of 2022. Adjusted EBITDA for the third
quarter of 2023 was negatively impacted by the aforementioned
higher product warranty expense of approximately $13 million. The UAW work stoppage had an
impact of approximately $4
million.
AAM's net cash provided by operating activities for the third
quarter of 2023 was $178.3 million as compared to $85.2 million for the third quarter of
2022.
AAM's Adjusted free cash flow for the third quarter of 2023 was
$135.8 million as compared to
$45.8 million for the third quarter
of 2022.
AAM's 2023 Updated Financial Outlook
AAM's updated
full year 2023 financial targets are now as
follows:
- AAM is targeting sales in the range of $6.0 - $6.1
billion.
- AAM is targeting Adjusted EBITDA in the range of $660 - $685
million.
- Outlook assumes production begins to resume during the first
week of November from the UAW work stoppage and an estimated
work stoppage impact of $70 -
$100 million in sales and
$25 - $40
million in adjusted EBITDA.
- AAM is targeting Adjusted free cash flow in the range of
$200 - $215
million; this target assumes capital spending of
approximately 3.0% - 3.5% of sales.
These updated 2023 targets are based on the following:
- The current macro operating environment.
- AAM's production estimates of key programs that we
support.
Third Quarter 2023 Conference Call Information
A conference call to review AAM's third quarter 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 (877) 883-0383 from the United
States or (412) 902-6506 from outside the United States with access code 5049794. A
replay will be available one hour after the call is complete until
November 10, 2023 by dialing (877) 344-7529 from the United States or (412) 317-0088 from
outside the United States. When
prompted, callers should enter replay access code 5629227.
Non-GAAP Financial Information
In addition to
the results reported in accordance with accounting principles
generally accepted in the United States
of America (GAAP) included within this press release, AAM
has provided certain information, which includes non-GAAP financial
measures such as Adjusted EBITDA, Adjusted earnings per share and
Adjusted free cash flow. Such information is reconciled to
its closest GAAP measure in accordance with Securities and Exchange
Commission rules and is included in the attached supplemental
data.
Certain of the forward-looking financial measures included in
this earnings release are provided on a non-GAAP basis. A
reconciliation of non-GAAP forward-looking financial measures to
the most directly comparable forward-looking financial measures
calculated and presented in accordance with GAAP has been
provided. The amounts in these reconciliations are based on
our current estimates and actual results may differ materially from
these forward-looking estimates for many reasons, including
potential event driven transactional and other non-core operating
items and their related effects in any future period, the magnitude
of which may be significant.
Management believes that these non-GAAP financial measures are
useful to management, investors, and banking institutions in their
analysis of the Company's business and operating performance.
Management also uses this information for operational planning and
decision-making purposes.
Non-GAAP financial measures are not and should not be considered
a substitute for any GAAP measure. Additionally, non-GAAP financial
measures as presented by AAM may not be comparable to similarly
titled measures reported by other companies.
Definition of Non-GAAP Financial Measures
AAM
defines Adjusted earnings (loss) per share to be diluted earnings
(loss) per share excluding the impact of restructuring and
acquisition-related costs, debt refinancing and redemption costs,
loss on sale of business, pension settlements, unrealized gains or
losses on equity securities and non-recurring items, including the
tax effect thereon.
AAM defines EBITDA to be earnings before interest expense,
income taxes, depreciation and amortization. Adjusted EBITDA is
defined as EBITDA excluding the impact of restructuring and
acquisition-related costs, debt refinancing and redemption costs,
loss on sale of business, pension settlements, unrealized gains or
losses on equity securities and non-recurring items.
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. Adjusted free cash flow is
defined as free cash flow excluding the impact of cash payments for
restructuring and acquisition-related costs, and cash payments
related to the Malvern fire, including payments for capital
expenditures, net of recoveries.
Company Description
As a leading global Tier 1
Automotive and Mobility Supplier, AAM (NYSE: AXL) designs,
engineers and manufactures Driveline and Metal Forming technologies
to support electric, hybrid and internal combustion vehicles.
Headquartered in Detroit, with
over 80 facilities in 18 countries, AAM is bringing the future
faster for a safer and more sustainable tomorrow. To learn
more, visit aam.com.
Forward-Looking Statements
In this earnings
release, we make statements concerning our expectations, beliefs,
plans, objectives, goals, strategies, and future events or
performance. Such statements are "forward-looking" statements
within the meaning of the Private Securities Litigation Reform Act
of 1995 and relate to trends and events that may affect our future
financial position and operating results. The terms such as "will,"
"may," "could," "would," "plan," "believe," "expect," "anticipate,"
"intend," "project," "target," and similar words or expressions, as
well as statements in future tense, are intended to identify
forward-looking statements. Forward-looking statements should
not be read as a guarantee of future performance or results and
will not necessarily be accurate indications of the times at, or
by, which such performance or results will be achieved.
Forward-looking statements are based on information available at
the time those statements are made and/or management's good faith
belief as of that time with respect to future events and are
subject to risks and may differ materially from those expressed in
or suggested by the forward-looking statements. Important factors
that could cause such differences include, but are not limited to:
global economic conditions, including the impact of inflation,
recession or recessionary concerns, or slower growth in the markets
in which we operate; reduced purchases of our products by General
Motors Company (GM), Stellantis N.V. (Stellantis), Ford Motor
Company (Ford) or other customers; our ability to respond to
changes in technology, increased competition or pricing pressures;
our ability to develop and produce new products that reflect market
demand; lower-than-anticipated market acceptance of new or existing
products; our ability to attract new customers and programs for new
products; reduced demand for our customers' products (particularly
light trucks and sport utility vehicles (SUVs) produced by GM,
Stellantis and Ford); risks inherent in our global operations
(including tariffs and the potential consequences thereof to us,
our suppliers, and our customers and their suppliers, adverse
changes in trade agreements, such as the
United States-Mexico-Canada Agreement (USMCA), compliance
with customs and trade regulations, immigration policies, political
stability or geopolitical conflicts, taxes and other law changes,
potential disruptions of production and supply, and currency rate
fluctuations); supply shortages, such as the semiconductor shortage
that the automotive industry has recently experienced and the
availability of natural gas or other fuel and utility sources in
certain regions, labor shortages, including increased labor costs,
or price increases in raw material and/or freight, utilities or
other operating supplies for us or our customers as a result of
pandemic or epidemic illness such as COVID-19, geopolitical
conflicts, natural disasters or otherwise; a significant disruption
in operations at one or more of our key manufacturing facilities;
negative or unexpected tax consequences; risks related to a failure
of our information technology systems and networks, including
cloud-based applications, and risks associated with current and
emerging technology threats and damage from computer viruses,
unauthorized access, cyber attacks and other similar disruptions;
our suppliers', our customers' and their suppliers' ability to
maintain satisfactory labor relations and avoid or minimize work
stoppages; cost or availability of financing for working capital,
capital expenditures, research and development (R&D) or other
general corporate purposes including acquisitions, as well as our
ability to comply with financial covenants; our customers' and
suppliers' availability of financing for working capital, capital
expenditures, R&D or other general corporate purposes; an
impairment of our goodwill, other intangible assets, or long-lived
assets if our business or market conditions indicate that the
carrying values of those assets exceed their fair values;
liabilities arising from warranty claims, product recall or field
actions, product liability and legal proceedings to which we are or
may become a party, or the impact of product recall or field
actions on our customers; our ability or our customers' and
suppliers' ability to successfully launch new product programs on a
timely basis; risks of environmental issues, including impacts of
climate-related events, that could result in unforeseen issues or
costs at our facilities, or risks of noncompliance with
environmental laws and regulations, including reputational damage;
our ability to maintain satisfactory labor relations and avoid work
stoppages; our ability to consummate and successfully integrate
acquisitions and joint ventures; our ability to achieve the level
of cost reductions required to sustain global cost competitiveness
or our ability to recover certain cost increases from our
customers; our ability to realize the expected revenues from our
new and incremental business backlog; price volatility in, or
reduced availability of, fuel; our ability to protect our
intellectual property and successfully defend against assertions
made against us; adverse changes in laws, government regulations or
market conditions affecting our products or our customers'
products; our ability or our customers' and suppliers' ability to
comply with regulatory requirements and the potential costs of such
compliance; changes in liabilities arising from pension and other
postretirement benefit obligations; our ability to attract and
retain qualified personnel in key positions and functions; and
other unanticipated events and conditions that may hinder our
ability to compete. It is not possible to foresee or identify all
such factors and we make no commitment to update any
forward-looking statement or to disclose any facts, events or
circumstances after the date hereof that may affect the accuracy of
any forward-looking statement.
For more information:
Investor Contact
David H. Lim
Head of Investor
Relations
(313)
758-2006
david.lim@aam.com
Media Contact
Christopher M. Son
Vice President, Marketing & Communications
(313) 758-4814
chris.son@aam.com
Or visit the AAM website at www.aam.com.
|
AMERICAN AXLE &
MANUFACTURING HOLDINGS, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(in millions, except
per share data)
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
1,551.9
|
|
$
1,535.2
|
|
$
4,616.5
|
|
$
4,409.7
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
1,421.3
|
|
1,357.8
|
|
4,147.1
|
|
3,872.0
|
|
|
|
|
|
|
|
|
|
Gross profit
|
130.6
|
|
177.4
|
|
469.4
|
|
537.7
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
81.8
|
|
85.7
|
|
271.2
|
|
256.6
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets
|
21.4
|
|
21.5
|
|
64.2
|
|
64.4
|
|
|
|
|
|
|
|
|
|
Restructuring and
acquisition-related costs
|
3.5
|
|
7.9
|
|
16.2
|
|
26.4
|
|
|
|
|
|
|
|
|
|
Operating
income
|
23.9
|
|
62.3
|
|
117.8
|
|
190.3
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(50.8)
|
|
(44.8)
|
|
(151.5)
|
|
(132.2)
|
|
|
|
|
|
|
|
|
|
Interest
income
|
7.1
|
|
5.4
|
|
18.9
|
|
11.6
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Debt refinancing and
redemption costs
|
(0.3)
|
|
(0.2)
|
|
(0.3)
|
|
(6.0)
|
|
Gain on bargain
purchase of business
|
—
|
|
1.4
|
|
—
|
|
13.0
|
|
Unrealized loss on
equity securities
|
(1.2)
|
|
(2.3)
|
|
(1.2)
|
|
(24.0)
|
|
Other income
(expense), net
|
1.9
|
|
(1.0)
|
|
5.1
|
|
(4.4)
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
(19.4)
|
|
20.8
|
|
(11.2)
|
|
48.3
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
(2.0)
|
|
(5.7)
|
|
3.3
|
|
(2.1)
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
(17.4)
|
|
$
26.5
|
|
$
(14.5)
|
|
$
50.4
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss)
per share
|
$
(0.15)
|
|
$
0.22
|
|
$
(0.12)
|
|
$
0.42
|
|
AMERICAN AXLE &
MANUFACTURING HOLDINGS, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
|
September 30,
2023
|
|
December 31,
2022
|
|
(in
millions)
|
|
ASSETS
|
|
|
|
|
Current
assets
|
|
|
Cash and cash
equivalents
|
$
615.6
|
|
$
511.5
|
|
Accounts receivable,
net
|
885.2
|
|
820.2
|
|
Inventories,
net
|
460.4
|
|
463.9
|
|
Prepaid expenses and
other
|
178.0
|
|
197.8
|
|
Total current
assets
|
2,139.2
|
|
1,993.4
|
|
|
|
|
|
Property, plant and
equipment, net
|
1,765.4
|
|
1,903.0
|
|
Deferred income
taxes
|
152.0
|
|
119.0
|
|
Goodwill
|
181.0
|
|
181.6
|
|
Other intangible
assets, net
|
553.3
|
|
616.2
|
|
GM postretirement cost
sharing asset
|
126.6
|
|
127.6
|
|
Operating lease
right-of-use assets
|
113.6
|
|
107.2
|
|
Other assets and
deferred charges
|
443.9
|
|
421.4
|
|
Total
assets
|
$
5,475.0
|
|
$
5,469.4
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Current portion of
long-term debt
|
$
24.5
|
|
$
75.9
|
|
Accounts
payable
|
811.7
|
|
734.0
|
|
Accrued compensation
and benefits
|
196.8
|
|
186.6
|
|
Deferred
revenue
|
15.5
|
|
28.1
|
|
Current portion of
operating lease liabilities
|
21.5
|
|
21.1
|
|
Accrued expenses and
other
|
178.7
|
|
153.6
|
|
Total current
liabilities
|
1,248.7
|
|
1,199.3
|
|
|
|
|
|
Long-term debt,
net
|
2,833.9
|
|
2,845.1
|
|
Deferred
revenue
|
67.1
|
|
73.4
|
|
Deferred income
taxes
|
6.7
|
|
10.7
|
|
Long-term portion of
operating lease liabilities
|
93.7
|
|
87.2
|
|
Postretirement benefits
and other long-term liabilities
|
611.2
|
|
626.4
|
|
Total
liabilities
|
4,861.3
|
|
4,842.1
|
|
|
|
|
|
Total AAM stockholders'
equity
|
613.7
|
|
627.3
|
|
Total liabilities
and stockholders' equity
|
$
5,475.0
|
|
$
5,469.4
|
|
|
|
|
|
|
|
|
|
AMERICAN AXLE &
MANUFACTURING HOLDINGS, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(in
millions)
|
|
Operating
activities
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
(17.4)
|
|
$
26.5
|
|
$
(14.5)
|
|
$
50.4
|
|
Adjustments to
reconcile net income (loss) to net cash
provided by operating activities
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
120.4
|
|
124.8
|
|
365.8
|
|
367.1
|
|
Other
|
75.3
|
|
(66.1)
|
|
(8.1)
|
|
(117.1)
|
|
Net cash provided by
operating activities
|
178.3
|
|
85.2
|
|
343.2
|
|
300.4
|
|
|
|
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
|
|
|
|
Purchases of property,
plant and equipment
|
(47.9)
|
|
(46.7)
|
|
(138.6)
|
|
(117.9)
|
|
Proceeds from sale of
property, plant and equipment
|
0.4
|
|
0.1
|
|
0.8
|
|
4.3
|
|
Acquisition of
business, net of cash acquired
|
(0.6)
|
|
(0.7)
|
|
(1.9)
|
|
(88.3)
|
|
Other
|
(0.7)
|
|
0.1
|
|
13.0
|
|
4.5
|
|
Net cash used in
investing activities
|
(48.8)
|
|
(47.2)
|
|
(126.7)
|
|
(197.4)
|
|
|
|
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
|
|
|
|
Net debt
activity
|
(17.5)
|
|
(56.9)
|
|
(82.9)
|
|
(151.2)
|
|
Other
|
(3.3)
|
|
(4.2)
|
|
(25.3)
|
|
3.4
|
|
Net cash used in
financing activities
|
(20.8)
|
|
(61.1)
|
|
(108.2)
|
|
(147.8)
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash
|
(4.2)
|
|
(6.0)
|
|
(4.2)
|
|
(13.1)
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
104.5
|
|
(29.1)
|
|
104.1
|
|
(57.9)
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at beginning of period
|
511.1
|
|
501.4
|
|
511.5
|
|
530.2
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at end of period
|
$
615.6
|
|
$
472.3
|
|
$
615.6
|
|
$
472.3
|
|
AMERICAN AXLE &
MANUFACTURING HOLDINGS, INC.
SUPPLEMENTAL
DATA
(Unaudited)
The supplemental data
presented below is a reconciliation of certain financial measures
which is intended
to facilitate analysis
of American Axle & Manufacturing Holdings, Inc. business and
operating performance.
Earnings before
interest expense, income taxes and depreciation and amortization
(EBITDA) and Adjusted EBITDA(a)
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(in
millions)
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
(17.4)
|
|
$
26.5
|
|
$
(14.5)
|
|
$
50.4
|
|
Interest
expense
|
50.8
|
|
44.8
|
|
151.5
|
|
132.2
|
|
Income tax expense
(benefit)
|
(2.0)
|
|
(5.7)
|
|
3.3
|
|
(2.1)
|
|
Depreciation and
amortization
|
120.4
|
|
124.8
|
|
365.8
|
|
367.1
|
|
EBITDA
|
151.8
|
|
190.4
|
|
506.1
|
|
547.6
|
|
Restructuring and
acquisition-related costs
|
3.5
|
|
7.9
|
|
16.2
|
|
26.4
|
|
Debt refinancing and
redemption costs
|
0.3
|
|
0.2
|
|
0.3
|
|
6.0
|
|
Unrealized loss on
equity securities
|
1.2
|
|
2.3
|
|
1.2
|
|
24.0
|
|
Non-recurring
items:
|
|
|
|
|
|
|
|
|
Malvern fire insurance
recoveries, net
|
—
|
|
(1.0)
|
|
—
|
|
(6.4)
|
|
Acquisition-related
fair value inventory adjustment
|
—
|
|
—
|
|
—
|
|
5.0
|
|
Gain on bargain
purchase of business
|
—
|
|
(1.4)
|
|
—
|
|
(13.0)
|
|
Adjusted
EBITDA
|
$
156.8
|
|
$
198.4
|
|
$
523.8
|
|
$
589.6
|
|
Adjusted earnings (loss) per
share(b)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Diluted earnings (loss)
per share
|
$
(0.15)
|
|
$
0.22
|
|
$
(0.12)
|
|
$
0.42
|
|
Restructuring and
acquisition-related costs
|
0.04
|
|
0.07
|
|
0.14
|
|
0.22
|
|
Debt refinancing and
redemption costs
|
—
|
|
—
|
|
—
|
|
0.05
|
|
Unrealized loss on
equity securities
|
0.01
|
|
0.02
|
|
0.01
|
|
0.20
|
|
Non-recurring
items:
|
|
|
|
|
|
|
|
|
Malvern fire insurance
recoveries, net
|
—
|
|
(0.01)
|
|
—
|
|
(0.05)
|
|
Acquisition-related
fair value inventory adjustment
|
—
|
|
—
|
|
—
|
|
0.04
|
|
Gain on bargain
purchase of business
|
—
|
|
(0.01)
|
|
—
|
|
(0.11)
|
|
Tax effect of
adjustments
|
$
(0.01)
|
|
(0.02)
|
|
(0.03)
|
|
(0.10)
|
|
Adjusted earnings
(loss) per share
|
$
(0.11)
|
|
$
0.27
|
|
$
—
|
|
$
0.67
|
|
|
Adjusted earnings
(loss) per share are based on weighted average diluted shares
outstanding of 117.1 million and 121.1 million for the three
months ended September 30, 2023 and 2022 respectively, and
116.5 million and 120.2 million for the nine months ended
September 30, 2023 and 2022 respectively.
|
|
AMERICAN AXLE &
MANUFACTURING HOLDINGS, INC
SUPPLEMENTAL
DATA
(Unaudited)
The supplemental data
presented below is a reconciliation of certain financial measures
which is intended
to facilitate analysis
of American Axle & Manufacturing Holdings, Inc. business and
operating performance
Free cash flow and
Adjusted free cash flow(c)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(in
millions)
|
|
Net cash provided by
operating activities
|
$
178.3
|
|
$
85.2
|
|
$
343.2
|
|
$
300.4
|
|
Capital expenditures
net of proceeds from the sale of property,
plant and equipment
|
(47.5)
|
|
(46.6)
|
|
(137.8)
|
|
(113.6)
|
|
Free cash
flow
|
$
130.8
|
|
$
38.6
|
|
$
205.4
|
|
$
186.8
|
|
Cash payments for
restructuring and acquisition-related costs
|
5.0
|
|
4.7
|
|
16.1
|
|
21.2
|
|
Cash payments
(insurance proceeds) related to Malvern fire, net
|
—
|
|
2.5
|
|
(7.0)
|
|
6.0
|
|
Adjusted free cash
flow
|
$
135.8
|
|
$
45.8
|
|
$
214.5
|
|
$
214.0
|
|
Segment Financial Information
On June 1, 2022, our
acquisition of Tekfor became effective and we began consolidating
the results of Tekfor on that date, which are
reported in our Metal Forming segment. In the first quarter of
2023, we moved a plant location that was previously reported under
our
Driveline segment to our Metal Forming segment in order to better
align our product and process technologies. The amounts in the
tables below for the three and nine months ended September 30, 2022
have been recast to reflect this reorganization
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(in
millions)
|
|
Segment
Sales
|
|
|
|
|
|
|
|
|
Driveline
|
$
1,061.2
|
|
$
1,043.2
|
|
$
3,161.5
|
|
$
3,113.3
|
|
Metal
Forming
|
624.8
|
|
634.1
|
|
1,878.1
|
|
1,716.9
|
|
Total
Sales
|
1,686.0
|
|
1,677.3
|
|
5,039.6
|
|
4,830.2
|
|
Intersegment
Sales
|
(134.1)
|
|
(142.1)
|
|
(423.1)
|
|
(420.5)
|
|
Net External
Sales
|
$
1,551.9
|
|
$
1,535.2
|
|
$
4,616.5
|
|
$
4,409.7
|
|
|
|
|
|
|
|
|
|
Segment Adjusted
EBITDA(a)
|
|
|
|
|
|
|
|
|
Driveline
|
$
137.3
|
|
$
137.0
|
|
$
403.5
|
|
$
392.2
|
|
Metal
Forming
|
19.5
|
|
61.4
|
|
120.3
|
|
197.4
|
|
Total Segment
Adjusted EBITDA
|
$
156.8
|
|
$
198.4
|
|
$
523.8
|
|
$
589.6
|
|
Full Year 2023
Financial Outlook
|
|
Adjusted
EBITDA
|
|
Low
End
|
|
High
End
|
|
(in
millions)
|
|
Net loss
|
$
(65)
|
|
$
(45)
|
|
Interest
expense
|
200
|
|
200
|
|
Income tax
expense
|
15
|
|
20
|
|
Depreciation and
amortization
|
490
|
|
490
|
|
Full year 2023 targeted
EBITDA
|
640
|
|
665
|
|
Restructuring and
acquisition-related costs
|
20
|
|
20
|
|
Full year 2023
targeted Adjusted EBITDA
|
$
660
|
|
$
685
|
|
|
Adjusted Free Cash
Flow
|
|
Low
End
|
|
High
End
|
|
(in
millions)
|
|
Net cash provided by
operating activities
|
$
380
|
|
$
395
|
|
Capital expenditures
net of proceeds from the sale of property,
plant and equipment
|
(200)
|
|
(200)
|
|
Full year 2023 targeted
Free Cash Flow
|
180
|
|
195
|
|
Cash payments for
restructuring and acquisition-related costs
|
25
|
|
25
|
|
Other
|
(5)
|
|
(5)
|
|
Full year 2023
targeted Adjusted Free Cash Flow
|
$
200
|
|
$
215
|
___________
|
(a)
|
We define EBITDA to be
earnings before interest expense, income taxes, depreciation and
amortization. Adjusted EBITDA is defined as EBITDA excluding
the impact of restructuring and acquisition-related costs, debt
refinancing and redemption costs, loss on sale of a business,
pension settlements, unrealized gains or losses on equity
securities and non-recurring items. We believe that EBITDA
and Adjusted EBITDA are meaningful measures of performance as they
are commonly utilized by management and investors to analyze
operating performance and entity valuation. Our management,
the investment community and the banking institutions routinely use
EBITDA and Adjusted EBITDA, together with other measures, to
measure our operating performance relative to other Tier 1
automotive suppliers. We also use Segment Adjusted EBITDA as
the measure of earnings to assess the performance of each segment
and determine the resources to be allocated to the segments. EBITDA
and Adjusted EBITDA are also key metrics used in our calculation of
incentive compensation. EBITDA and Adjusted EBITDA should not
be construed as income from operations, net income or cash flow
from operating activities as determined under GAAP. Other
companies may calculate EBITDA and Adjusted EBITDA
differently.
|
|
(b)
|
We define Adjusted
earnings (loss) per share to be diluted earnings per share
excluding the impact of restructuring and acquisition-related
costs, debt refinancing and redemption costs, loss on sale of a
business, pension settlements, unrealized gains or losses on equity
securities and non-recurring items, including the tax effect
thereon. We believe Adjusted earnings (loss) per share is a
meaningful measure as it is commonly utilized by management and
investors in assessing ongoing financial performance that provides
improved comparability between periods through the exclusion of
certain items that management believes are not indicative of core
operating performance and which may obscure underlying business
results and trends. Other companies may calculate Adjusted
earnings (loss) per share differently.
|
|
(c)
|
We define 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. Adjusted free cash flow is defined as free cash
flow excluding the impact of cash payments for restructuring and
acquisition-related costs and cash payments related to the Malvern
fire, including payments for capital expenditures, net of
recoveries. We believe free cash flow and Adjusted free cash flow
are meaningful measures as they are commonly utilized by management
and investors to assess our ability to generate cash flow from
business operations to repay debt and return capital to our
stockholders. Free cash flow and Adjusted free cash flow are
also key metrics used in our calculation of incentive
compensation. Other companies may calculate free cash flow
and Adjusted free cash flow differently.
|
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SOURCE American Axle & Manufacturing Holdings, Inc.