America Axle Reports Earnings In The Second Quarter Of 2014
American Axle & Manufacturing Holdings, Inc. (AXL) recently reported its financial results for the second quarter of 2014.
Highlights From The Quarter:
Second quarter 2014 sales of $946.9 million, up approximately 18.4% on a year-over-year basis:
Non-GM sales grew 33.2% on a year-over-year basis to $298.1 million
Gross profit of $149.0 million, or 15.7% of sales
Net income of $52.2 million, or $0.67 per share
EBITDA (earnings before interest, income taxes, depreciation and amortization) of $136.7 million, or 14.4% of sales
Free cash flow (net cash provided by operating activities less capital expenditures net of proceeds from the sale of property, plant, and equipment) of $82.5 million
Management Comments:
AAM's net income in the second quarter of 2014 was $52.2 million, or $0.67 per share as compared to net income of $25.8 million, or $0.34 per share, in the second quarter of 2013.
"AAM's financial results in the second quarter of 2014 reflect strong sales growth and profitability driven by the favorable impact of increased production volumes across many of our major product programs supporting the North American light vehicle segment," said AAM's Chairman, President and Chief Executive Officer, David C. Dauch. "AAM is energized to continue supporting these and other new global product and process launches during the remainder of this year and continuing through the year 2015. Many of these launches feature exciting new advanced driveline technologies that are enhancing the diversification of our business and positioning AAM for solid profitability and consistent free cash flow generation."
Results From The Quarter:
AAM's sales in the second quarter of 2014 increased approximately 18.4% to $946.9 million as compared to $799.6 million in the second quarter of 2013. Led by higher sales in support of Chrysler's all-new Jeep Cherokee and heavy-duty Ram full-size pickup trucks and its derivatives, non-GM sales grew 33.2% on a year-over-year basis to $298.1 million in the second quarter of 2014 as compared to $223.8 million in the second quarter of 2013.
AAM's net sales in the first half of 2014 increased approximately 16.1% to $1.81 billion as compared to $1.56 billion in the first half of 2013. Non-GM sales in the first half of 2014 increased approximately 42.2% on a year-over-year basis to $585.9 million as compared to $411.9 million in the first half of 2013.
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 second quarter of 2014, AAM's content-per-vehicle increased 5.5% to $1,640 as compared to $1,554 in the second quarter of 2013.
AAM's gross profit in the second quarter of 2014 was $149.0 million, or 15.7% of sales, as compared to $122.2 million, or 15.3% of sales, in the second quarter of 2013.
AAM's gross profit for the first half of 2014 was $270.9 million as compared to $226.5 million in the first half of 2013. Gross margin was 15.0% in the first half of 2014 as compared to 14.6% in the first half of 2013.
Operating Results:
In the second quarter of 2014, AAM's operating income increased nearly $26 million to $87.5 million, or 9.2% of sales, as compared to $61.7 million, or 7.7% of sales, in the second quarter of 2013.
AAM's operating income in the first half of 2014 was $152.3 million as compared to $106.4 million in the first half of 2013. Operating margin was 8.4% in the first half of 2014 as compared to 6.8% in the first half of 2013.
AAM's SG&A spending in the second quarter of 2014 was $61.5 million, or 6.5% of sales, as compared to $60.5 million, or 7.6% of sales, in the second quarter of 2013. AAM's R&D spending in the second quarter of 2014 was $24.4 million as compared to $27.3 million in the second quarter of 2013.
In the first half of 2014, AAM's SG&A spending was $118.6 million as compared to $120.1 million in the first half of 2013. AAM's R&D spending in the first half of 2014 was $50.2 million as compared to $55.8 million in the first half of 2013.
In the second quarter of 2014, AAM's net income was $52.2 million, or $0.67 per share as compared to $25.8 million, or $0.34 per share in the second quarter of 2013. AAM's net income in the first half of 2014 was $85.8 million, or $1.11 per share as compared to $33.1 million, or $0.43 per share in the first half of 2013.
AAM defines EBITDA to be earnings before interest, income taxes, depreciation and amortization. In the second quarter of 2014, AAM's EBITDA increased over $34.3 million to $136.7 million, or 14.4% of sales, as compared to $102.4 million, or 12.8% of sales, in the second quarter of 2013.
AAM defines free cash flow to be net cash provided by (used in) operating activities less capital expenditures net of proceeds from the sale of property, plant and equipment and the sale-leaseback of equipment.
Net cash provided by operating activities for the second quarter of 2014 was $137.9 million. Capital spending, net of proceeds from the sale of property, plant and equipment, for the second quarter of 2014 was $55.4 million. Reflecting the impact of this activity, AAM generated free cash flow of $82.5 million for the second quarter of 2014.
This article first appeared on GuruFocus.
