DETROIT — American Axle & Manufacturing Holdings, which is traded as AXL on the NYSE, today reported its financial results for the fourth quarter and full year 2012.
American Axle’s net income in the fourth quarter of 2012 was $319.9 million, or $4.21 per share, which includes the favorable impact of a $337.5 million benefit related to the reversal of our valuation allowance against our net federal deferred tax assets for entities in the United States. This compares to net income of $31.1 million, or $0.41 per share, in the fourth quarter of 2011.
In the fourth quarter of 2012, American Axle’s results reflect the impact of $9.7 million (or $0.13 per share) of debt refinancing and redemption costs and $6.2 million (or $0.08 per share) of restructuring costs related to the closure of our Detroit Manufacturing Complex and Cheektowaga Manufacturing Facility.
In the fourth quarter of 2011, American Axle’s results reflect the impact of $4.8 million (or $0.06 per share) of special charges and restructuring costs primarily related to the closure of our Detroit Manufacturing Complex and Cheektowaga Manufacturing Facility.
For the full year 2012, American Axle’s net income was $367.7 million, or $4.87 per share. This compares to net income of $142.8 million, or $1.89 per share in 2011.
On a full year basis in 2012, American Axle & Manufacturing incurred $19.8 million (or $0.26 per share) of debt refinancing and redemption costs and $40.6 million (or $0.54 per share) of restructuring costs related to the closure of our Detroit Manufacturing Complex and Cheektowaga Manufacturing Facility.
On a full year basis in 2011, American Axle & Manufacturing incurred $15.0 million (or $0.20 per share) of special charges, asset impairments and restructuring costs primarily related to the planned closure of our Detroit Manufacturing Complex and Cheektowaga Manufacturing Facility. Also included in 2011 were special charges of $3.1 million related to debt redemption and refinancing costs and a $1.6 million asset impairment recorded by our e-American Axle joint venture related to the long-term supply agreement with Saab Automobile AB.
“2012 was an eventful year for American Axle & Manufacturing, characterized by substantial growth and diversification due to a high level of global launch activity. We made great strides in executing our diversification initiatives while strengthening our global footprint through our expanding customer and product base,” said American Axle’s president and CEO, David C. Dauch. “Financial performance in 2012 was characterized by both successes and challenges. In the second half of 2012, we experienced operational challenges and lower profitability, principally associated with an increased level of launch activity. We are taking necessary actions to correct these performance issues. As we move forward we do so with a disciplined and forward-looking approach, reaffirming our commitment to delivering quality, technology leadership and operational excellence.”
Net sales in the fourth quarter of 2012 increased approximately 21.6% to $736.7 million as compared to $605.6 million in the fourth quarter of 2011. Non-GM sales grew 16.6% on a year-over-year basis to $204.1 million in the fourth quarter of 2012 as compared to $175.0 million in the fourth quarter of 2011.
American Axle’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 fourth quarter of 2012, American Axle’s content-per-vehicle was $1,514 as compared to $1,498 in the fourth quarter of 2011. For the full year 2012, American Axle’s content-per-vehicle was $1,473 as compared to $1,487 in 2011.
Net sales for the full year 2012 increased by 13.4% to $2.9 billion as compared to $2.6 billion in 2011. Non-GM sales grew 11.6% on a year-over-year basis to $792.6 million in 2012 as compared to $710.0 million in 2011.
American Axle’s gross profit in the fourth quarter of 2012 was $84.0 million or 11.4% of sales. For the full year 2012, American Axle’s gross profit was $399.7 million, or 13.6% of sales.
American Axle & Manufacturing defines Adjusted EBITDA to be earnings before interest, taxes, depreciation and amortization excluding the impact of curtailments, asset impairments, restructuring costs and special charges related to the closure of the Detroit Manufacturing Complex and Cheektowaga Manufacturing Facility, and debt refinancing and redemption costs, to the extent applicable. In the fourth quarter of 2012, American Axle’s Adjusted EBITDA was $64.5 million or 8.8% of sales. For the full year 2012, American Axle’s Adjusted EBITDA was $346.7 million or 11.8% of sales.
AAM’s SG&A spending in the fourth quarter of 2012 was $65.4 million, or 8.9% of sales, as compared to $57.2 million, or 9.4% of sales, in the fourth quarter of 2011. AAM’s R&D spending in the fourth quarter of 2012 was $33.1 million as compared to $28.2 million in the fourth quarter of 2011.
AAM’s SG&A spending for the full year 2012 was $243.3 million, or 8.3% of sales, as compared to $231.7 million, or 9.0% of sales, for the full year 2011. AAM’s R&D spending for the full year 2012 was $123.4 million as compared to $113.6 million in 2011.
In the fourth quarter of 2012, AAM’s operating income was $18.6 million or 2.5% of sales. For the full year 2012, AAM’s operating income was $156.4 million, or 5.3% of sales.
In the fourth quarter of 2012, AAM’s net income was $319.9 million or 43.4% of sales. Diluted earnings per share (EPS) were $4.21 per share in the fourth quarter of 2012. For the full year 2012, AAM’s net income was $367.7 million or 12.5% of sales. Diluted earnings per share (EPS) were $4.87 per share for the full year 2012. These results include the favorable impact of a $337.5 million benefit related to the reversal of our valuation allowance against our net federal deferred tax assets for entities in the United States.
AAM defines free cash flow to be net cash provided by (or used in) operating activities less capital expenditures net of proceeds from the sale of property, plant & equipment and the sale-leaseback of equipment.
Net cash used in operating activities for the full year 2012 was $175.5 million. Capital spending, net of proceeds from the sale of property, plant and equipment and the sale-leaseback of equipment, for the full year 2012 was $185.4 million. Reflecting the impact of this activity, AAM’s free cash flow was a use of $360.9 million for the full year 2012.
AAM’s free cash flow for the full year 2012 reflects the impact of $225.4 million of contributions to our defined benefit pension plans. On September 27, 2012, AAM and the Pension Benefit Guaranty Corporation entered into an agreement in connection with the closures of the Detroit Manufacturing Complex and Cheektowaga Manufacturing Facility. As part of this agreement, in September 2012, we contributed $114.7 million in excess of our statutory minimums to our U.S. hourly pension plan which is included in the contributions described above. AAM’s free cash flow for the full year 2012 also reflects cash used for restructuring activities of $37.9 million.
A conference call to review AAM’s fourth quarter and full year 2012 results is scheduled today at 10:00 AM 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) 278-1452 from the United States or (973) 200-3383 from outside the United States. A replay will be available from 5:00 p.m. ET on February 8, 2013 until 5:00 p.m. ET February 15, 2013 by dialing (855) 859-2056 from the United States or (404) 537-3406 from outside the United States. When prompted, callers should enter conference reservation number 86568260.
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 information is reconciled to its closest GAAP measure in accordance with Securities and Exchange Commission rules and is included in the attached supplemental data.
Management believes that these non-GAAP financial measures are useful to both management and its stockholders 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.
AAM is a world leader in the manufacture, engineering, design and validation of driveline and drivetrain systems and related components and modules, chassis systems and metal-formed products for light trucks, sport utility vehicles, passenger cars, crossover vehicles and commercial vehicles. In addition to locations in the United States (Michigan, Ohio, Pennsylvania and Indiana), AAM also has offices or facilities in Brazil, China, Germany, India, Japan, Luxembourg, Mexico, Poland, Scotland, South Korea, Sweden and Thailand.
