Updates earnings and cash flow guidance for 2005
and provides initial outlook for 2006 earnings and cash flow
DETROIT, Jan. 12 /PRNewswire-FirstCall/ -- American Axle & Manufacturing
Holdings, Inc. (AAM), which is traded as AXL on the NYSE, today announced that
its backlog of new and incremental business launching from 2006 through 2012
is estimated at $1.4 billion in future annual sales.
AAM's new business backlog reflects its successful efforts to expand its
product portfolio to target growth segments of the global driveline and
drivetrain market, while diversifying its customer base. In addition to
General Motors and the Chrysler Group, AAM's expanded customer base now
includes Nissan, Audi, Ssangyong, Hino, Jatco, Koyo and Harley Davidson.
Included in AAM's new business backlog are seven driveline system awards
for passenger car and crossover vehicle programs being developed by three
global OEMs. Two of these awards support global rear-wheel drive passenger
car programs and five are for global crossover vehicle programs. AAM's newest
rear-wheel drive and all-wheel drive technologies will be featured on these
seven programs. Once they are fully launched, AAM expects to generate sales
in excess of $600 million from these programs.
In addition to the seven passenger car and crossover vehicle awards, AAM's
new business backlog also represents the incremental expansion of its existing
light truck and SUV product lines to support new programs and derivative
models.
Other highlights of AAM's $1.4 billion new business backlog include:
* AAM has earned over $200 million of new business outside of North
America. These awards provide the catalyst for AAM to construct a new
manufacturing facility in Changshu, China and a future facility in
Eastern/Central Europe.
* AAM has earned approximately $150 million of new business with Asian
OEMs and their affiliated suppliers.
* AAM will launch its first high-volume application of the SmartBar(TM)
electronic stabilizer system for the 2007 model year Jeep(R) Wrangler Rubicon.
* AAM will launch approximately 60% of its new business backlog in the
2006, 2007 and 2008 calendar years. The balance of the backlog will launch
between 2009 and 2012.
"AAM continues to focus on its long-term strategic goals of expanding our
product portfolio, served markets, customer base and global manufacturing
footprint. The continued expansion of AAM's new business backlog is evidence
that we are successfully delivering on these initiatives," said American Axle
& Manufacturing Co-Founder, Chairman of the Board & CEO, Richard E. Dauch.
"We are especially pleased with the growth in our backlog of orders for our
newest driveline technologies supporting rear-wheel drive and all-wheel-drive
systems for passenger cars and crossover vehicles."
AAM values its new business backlog based on production volume estimates
and program design direction provided by its customers. The sales value of
these awards will depend on product volumes, program launch timing and foreign
currency exchange.
AAM also updated earnings guidance for 2005 and provided its initial
outlook for 2006 earnings and cash flow.
AAM expects to report net earnings of approximately $56 million, or $1.10
per share, for the year ended December 31, 2005. These results include a
charge of approximately $9 million related to lump-sum voluntary separation
payments accepted by approximately 160 hourly associates in the fourth quarter
of 2005.
The company also confirmed that it will meet its free cash flow
expectations for the year.
AAM defines free cash flow to be net cash provided by (or used in)
operating activities less capital expenditures and dividends paid. Net cash
provided by operating activities in 2005 approximated $278 million. After
deducting capital expenditures and dividends, AAM expects to report a free
cash flow use of approximately $60 million for the year ended December 31,
2005.
AAM's 2006 earnings outlook is based on its assumption that its customers'
production volumes for the major North American light truck programs it
currently supports will be approximately 5 percent lower than in 2005.
Effective January 1, 2006, AAM adopted FASB Statement No. 123R. This new
accounting standard requires expensing of all stock-based compensation. AAM
currently estimates that its stock-based compensation expense will increase by
approximately $10 million in 2006. A reduction in the discount rate used to
estimate AAM's pension and postretirement obligations will increase AAM's 2006
costs by another $10 million.
Taking all of these factors into account, AAM expects its 2006 earnings to
be in the range of $1.20 to $1.30 per share.
Reflecting the estimated impact of its earnings guidance, working capital,
capital spending, and quarterly cash dividend program, AAM expects to generate
approximately $40 million of positive free cash flow in 2006.
AAM will be presenting at the Auto Analyst of New York (AANY) Detroit Auto
Conference and discussing its new business backlog, updated earnings and cash
flow guidance for 2005 and its initial outlook on 2006 earnings and cash flow
on Thursday, January 12, 2006 at 10:00 a.m. EST. AAM will webcast the
presentation through AAM's investor web site at http://investor.aam.com . The
presentation will be made by AAM's Co-Founder, Chairman & CEO Richard E.
Dauch.
AAM has scheduled a conference call to review its fourth quarter and full
year 2005 results on February 3, 2006 at 10:00 a.m. EST. 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 (706) 643-3736 from outside the United States.
AAM is a world leader in the manufacture, engineering, design and
validation of driveline systems and related components and modules, chassis
systems and metal-formed products for light trucks, sport utility vehicles and
passenger cars. In addition to its locations in the United States (in
Michigan, New York and Ohio), AAM also has offices or facilities in Brazil,
China, England, Germany, India, Japan, Mexico, Scotland and South Korea.
Certain statements contained in this press release are "forward-looking
statements" and relate to the Company's plans, projections or future
performance. Such statements are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995 and are based on our
current expectations, are inherently uncertain, are subject to risks and
should be viewed with caution. Actual results and experience may differ
materially from the forward-looking statements as a result of many factors,
including but not limited to: adverse changes in the economic conditions or
political stability of our principal markets (particularly North America,
Europe and South America); reduced demand of our customers' products,
particularly light trucks and SUVs produced by GM and DaimlerChrysler's heavy-
duty Dodge Ram full-size pickup trucks, or the Dodge Ram program; reduced
purchases of our products by GM, DaimlerChrysler or other customers; our
ability and our customers' ability to successfully launch new product
programs; our ability to respond to changes in technology or increased
competition; supply shortages or price fluctuations in raw materials,
utilities or other operating supplies; our ability to attract and retain key
associates; our ability to maintain satisfactory labor relations and avoid
work stoppages; risks of noncompliance with environmental regulations or risks
of environmental issues that could result in unforeseen costs at our
facilities; liabilities arising from legal proceedings to which we are or may
become a party or claims against us or our products; availability of financing
for working capital, capital expenditures, research and development or other
general corporate purposes; adverse changes in laws, government regulations or
market conditions affecting our products or our customers' products (including
the Corporate Average Fuel Economy regulations); 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 statements.
For more information...
Carrie L.P. Gray Christopher M. Son
Director, Corporate Relations Director, Investor Relations
(313) 758-4880 (313) 758-4814
grayc@aam.com chris.son@aam.com
Or visit the AAM website at http://www.aam.com
SOURCE American Axle & Manufacturing Holdings, Inc.
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Related links:
http://www.aam.com
http://investor.aam.com
Company News On-Call:
http://www.prnewswire.com/comp/033813.html
CONTACT:
Carrie L.P. Gray, Director, Corporate
Relations, +1-313-758-4880, grayc@aam.com , or Christopher M.
Son, Director, Investor Relations, +1-313-758-4814,
chris.son@aam.com , both of American Axle & Manufacturing
Holdings, Inc.
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