Accuride Corporation (NYSE:ACW) – a leading supplier of components to the North American commercial vehicle industry – today reported strong financial results for the first quarter ended March 31, 2015.

First Quarter 2015 Results

First quarter 2015 net sales from continuing operations were $183.7 million, compared with $166.8 million in the same period in 2014, an increase of 10.1 percent, primarily reflecting the impact of stronger industry conditions in the Company’s Wheels and Brillion segments during the quarter. Accuride’s operating income was $9.3 million for the quarter, as compared to operating income of $6.6 million in the first quarter of 2014. The Company reported a net loss of $0.6 million, or $0.01 per share, during the quarter, compared to a net loss of $3.3 million, or $0.07 per share, in 2014. First quarter Adjusted EBITDA increased by 18.5 percent year-over-year to $21.3 million, or 11.6 percent of net sales, compared to $18.0 million, or 10.8 percent of net sales, in the same quarter of 2014. As of March 31, 2015, Accuride had $17.6 million of cash plus $53.3 million in availability under its ABL Credit Facility for total liquidity of $70.9 million.

Industry Conditions

In the first quarter, North American truck and trailer production continued to increase at a healthy pace. Class 8, Class 5-7 and Trailer production grew by 19 percent, 13 percent and 28 percent, respectively, compared to 2014. Class 8 net orders, although still strong, began to level out toward a more normalized pace. Continued order strength is expected to translate into increased OEM production levels over the next several quarters, with full-year Class 8 production at levels 5 to 10 percent higher than 2014. Trailer segment net orders in the first quarter also began to level off and trailer builds are expected to grow by approximately 5 to 10 percent over 2014 levels. Driven by the expanding U.S. economy, first-quarter Medium-duty segment orders increased by 6 percent year-over-year, and full-year production is projected to be up 2 percent over 2014 levels. Fleets are generally optimistic about current conditions within the trucking industry. Freight tonnage is forecasted to steadily increase throughout the next several years, which will continue to drive increased demand for trucks and trailers going forward.

First Quarter Business Segment Results

Accuride Wheels

Accuride Wheels segment net sales were $108.3 million, up $16.1 million, or 17.5 percent, from the same period in 2014, primarily due to stronger OEM demand and market share gains in the aftermarket. Wheels’ Adjusted EBITDA was $22.2 million, an increase of $3.0 million, or 15.8 percent, from the first quarter of 2014. Additional shifts were added in Camden and Mexico to meet rising customer demand for aluminum wheels.

Gunite

Gunite segment net sales of $37.7 million were down $6.2 million, or 14.2 percent, from the first quarter of 2014, attributable primarily to lower aftermarket demand for brake drums and OEM demand for hubs. Gunite’s Adjusted EBITDA decreased by $0.2 million to $4.1 million, from $4.3 million in the first quarter of 2014.

Brillion Iron Works

Brillion Iron Works’ first quarter net sales were $37.6 million, up $7.0 million, or 22.8 percent, from the first quarter of 2014 on higher customer volumes. Brillion’s Adjusted EBITDA was $3.4 million, an increase of $1.0 million, from the first quarter of 2014. The Company currently expects Brillion’s top-line growth in 2015 to be flat compared to its previous guidance of 5 percent to 10 percent, due primarily to reduced demand in Brillion's oil and gas, agricultural and mining end markets.

Liquidity and Debt

As of March 31, 2015, total debt was $326.5 million, consisting of $306.5 million of our outstanding 9.5% senior secured notes, net of discount, and a $20.0 million draw on our ABL Credit Facility. As of March 31, 2015, Accuride had $17.6 million of cash plus $53.3 million in availability under its ABL Credit Facility, for total liquidity of $70.9 million.

Business and Market Outlook

"Accuride had a strong first quarter," said Rick Dauch, Accuride's President and CEO. "Our industry-leading quality, delivery and lead-time performance allowed us to renew and secure new long-term customer agreements at our Wheels and Gunite businesses. We are experiencing near-term headwinds at Brillion due to macro industry conditions."

2015 Financial Guidance

Accuride management expects the Company’s 2015 net sales to be in the range of $725 million to $775 million, and Adjusted EBITDA to be in the range of $85 million to $95 million. The midpoints of the Company’s revenue and Adjusted EBITDA ranges represent increases of 6 percent and 15 percent, respectively, over Accuride’s 2014 results. The Company has based its 2015 guidance on the following projections for the North American commercial vehicle industry: Class 8 production in the range of 310,000 to 330,000 units, Class 5-7 production in the range of 220,000 to 225,000 units and Trailer segment production in the range of 280,000 to 300,000 units. In addition, management expects net sales for the Brillion business unit to be flat versus 2014.

Earnings Conference Call Information

Accuride will host a conference call to discuss the financial and operational results of its First Quarter Fiscal Year 2015 on Monday, April 27, 2015, beginning at 9:00 a.m. CDT. Analysts and investors may participate on the conference call by dialing (800) 708-4539 in the United States, or (847) 619-6396 internationally, and using participant code 39490750. A live webcast of the conference call can be accessed via the Investors section of the company’s website – www.AccurideCorp.com/investors. A replay will be available from April 27, 2015, at 11:30 a.m. CDT until 11:59 p.m. CDT, May 4, 2015, by calling (888) 843-7419 in the United States, or (630) 652-3042 internationally, using access code 39490750.

About Accuride Corporation

With headquarters in Evansville, Ind., USA, Accuride Corporation is a leading supplier of components to the North American commercial vehicle industry. 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 SolutionsTM, Gunite®, and BrillionTM. 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, 2014. 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 March 31,

(Dollars in thousands) 2015   2014
       
Net sales:
Wheels $ 108,336 59.0 % $ 92,218 55.3 %
Gunite 37,740 20.5 % 43,973 26.4 %
Brillion   37,583 20.5 %   30,593 18.3 %
Total net sales $ 183,659 100.0 % $ 166,784 100.0 %
 
Gross Profit $ 20,931 11.4 % $ 17,023 10.2 %
 
Income (loss) from Operations:
Wheels $ 13,252 12.2 % $ 9,742 10.6 %
Gunite 2,741 7.3 % 3,278 7.5 %
Brillion Iron Works 2,196 5.8 % 1,275 4.2 %
Corporate / Other   (8,861) —   (7,726) —
Consolidated Total $ 9,328 5.1 % $ 6,569 3.9 %
 
Net Loss $ (588) (0.3) % $ (3,573) (2.1) %
 
Adjusted EBITDA:
Wheels $ 22,229 20.5 % $ 19,196 20.8 %
Gunite 4,076 10.8 % 4,317 9.8 %
Brillion Iron Works 3,381 9.0 % 2,414 7.9 %
Corporate / Other   (8,401) —   (7,971) —
Continuing Operations $ 21,285 11.6 % $ 17,956 10.8 %
 
 

ACCURIDE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

 
 

Three Months Ended March 31,

(In thousands except per share data) 2015   2014
 
NET SALES $ 183,659 $ 166,784
COST OF GOODS SOLD   162,728   149,761
GROSS PROFIT 20,931 17,023
OPERATING EXPENSES:
Selling, general and administrative   11,603   10,454
INCOME FROM OPERATIONS 9,328 6,569
OTHER INCOME (EXPENSE):
Interest expense, net (8,350) (8,420)
Other income (loss), net   (1,172)   (530)
LOSS BEFORE INCOME TAXES FROM CONTINUING OPERATIONS (194) (2,381)
INCOME TAX PROVISION   386   904
LOSS FROM CONTINUING OPERATIONS (580) (3,285)
DISCONTINUED OPERATIONS, NET OF TAX   (8)   (288)
NET LOSS $ (588) $ (3,573)
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Defined benefit plans   1,274   333
COMPREHENSIVE INCOME (LOSS) $ 686 $ (3,240)
Weighted average common shares outstanding—basic 47,822 47,596
Basic loss per share-continuing operations (0.01) (0.07)
Basic loss per share-discontinued operations   —   (0.01)
Basic loss per share $ (0.01) $ (0.08)
Weighted average common shares outstanding—diluted 47,822 47,596
Diluted loss per share-continuing operations (0.01) (0.07)
Diluted loss per share-discontinued operations   —   (0.01)
Diluted loss per share $ (0.01) $ (0.08)
 
 

ACCURIDE CORPORATION

CONSOLIDATED ADJUSTED EBITDA

(UNAUDITED)

 
 

Three Months Ended March 31,

(In thousands) 2015   2014
 
Net loss $ (588) $ (3,573)
Income tax provision 386 904
Interest expense, net 8,350 8,420
Depreciation and amortization 10,596 10,272
Restructuring, severance and other charges1 708 627
Other items related to our credit agreement2   1,833   1,306
Adjusted EBITDA $ 21,285 $ 17,956
 

Note:

1)   For the three months ended March 31, 2015, Adjusted EBITDA represents net income before net interest expense, income tax expense, depreciation and amortization, plus $0.7 million in costs associated with restructuring items. For the three months ended March 31, 2014, Adjusted EBITDA represents net income before net interest expense, income tax benefit, depreciation and amortization, plus $0.6 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 March 31, 2015, items related to our credit agreement consisted of foreign currency losses and other income or expenses of $1.8 million. For the three months ended March 31, 2014, items related to our credit agreement consisted of foreign currency losses and other income or expenses of $1.3 million.
 

ACCURIDE CORPORATION

SEGMENT ADJUSTED EBITDA RECONCILIATION

(UNAUDITED)

 
 

Three Months Ended March 31, 2015

(In thousands)

Income (loss)
from
Operations

  

Depreciation and
Amortization

   Other  

Adjusted
EBITDA

Wheels $ 13,252 $ 7,777 $ 1,200 $ 22,229
Gunite 2,741 1,085 250 4,076
Brillion Iron Works 2,196 1,155 30 3,381
Corporate / Other   (8,861)   569   (109)   (8,401)
Continuing Operations $ 9,328 $ 10,586 $ 1,371 $ 21,285
 
Imperial Group   (10)   10   —   —
Consolidated Total $ 9,318 $ 10,596 $ 1,371 $ 21,285
 
   

Three Months Ended March 31, 2014

(In thousands)

Income (loss)
from
Operations

  

Depreciation and
Amortization

   Other  

Adjusted
EBITDA

Wheels $ 9,742 $ 7,907 $ 1,547 $ 19,196
Gunite 3,278 789 250 4,317
Brillion Iron Works 1,275 1,109 30 2,414
Corporate / Other   (7,726)   456   (701)   (7,971)
Continuing Operations $ 6,569 $ 10,261 $ 1,126 $ 17,956
 
Imperial Group   (11)   11   —   —
Consolidated Total $ 6,558 $ 10,272 $ 1,126 $ 17,956
 
We define Adjusted EBITDA as our net income or loss before income tax expense or benefit, interest expense, net, depreciation and amortization, 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)

 

March 31,

December 31,
(In thousands) 2015 2014
 
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 17,570 $ 29,773
Customer and other receivables 82,665 63,570
Inventories 41,963 43,065
Other current assets   13,132   13,472
Total current assets 155,330 149,880
PROPERTY, PLANT AND EQUIPMENT, net 207,948 212,183
OTHER ASSETS:
Goodwill and other assets   235,613   236,359
TOTAL $ 598,891 $ 598,422
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable $ 65,051 $ 56,452
Other current liabilities   29,379   40,619
Total current liabilities 94,430 97,071
LONG-TERM DEBT 326,497 323,234
OTHER LIABILITIES 146,175 147,314
STOCKHOLDERS’ EQUITY:
Total stockholders’ equity   31,789   30,803
TOTAL $ 598,891 $ 598,422