Accuride Corp. has reported financial results for the fourth quarter and fiscal year ended Dec. 31, 2015.
“In diverse market conditions, we improved on several key financial measures in 2015, including Adjusted EBITDA, free cash flow and liquidity,” said Rick Dauch, Accuride president and CEO. “While Brillion’s results continued to be impacted by lower end-market demand, the Wheels and Gunite businesses performed exceptionally well in 2015. With their facilities operating at near-peak efficiencies, they converted this world-class operating performance and capable, available capacity into improved market share positions for wheels and wheel end components. This enabled us to generate $20 million in free cash flow in 2015 and improve our liquidity level to $77 million.
“Our investments in industry-leading technologies – such as our Steel Armor and newly-introduced EverSteel coatings – are further positioning us for success in the marketplace. In 2015, we converted 50 fleets to Accuride wheels and Gunite components. We also secured or renewed five long-term agreements with key truck OEMs and three with trailer OEs, giving us a solid three- to five-year foundation from which to expand.
“Although Class 8 volumes are projected to be approximately 20 percent lower in 2016, the Trailer and Aftermarket segments – where Accuride’s share has increased – are expected to be stable. In addition, 2016 will see the top-line benefit of our new majority stake in Gianetti Ruote, which serves Europe’s steadily-growing commercial vehicle industry. Now, more than ever, Accuride is a more competitive and strategically vital supplier to our customers in North America and Europe. We are confident our improved product and geographic platforms will lead to growth and increased stakeholder value.”
Fourth-Quarter 2015 Results
“Fourth quarter 2015 net sales were $153.1 million, a decrease of 11.4 percent from the year ago period. This was driven primarily by the lower demand in our Brillion segment and lower raw material prices, which was partially offset by $6.5 million in net sales related to our majority investment in Gianetti. Accuride’s operating loss was $1.6 million, which was impacted by a $4.4 million non-cash goodwill impairment charge related to Brillion and a $1.3 million loss related to the results at Gianetti. The company reported a net loss from continuing operations attributable to stockholders of $14.9 million, or a negative $0.31 per share, during the quarter. This included a loss of $0.09 per share related to the impairment charge at Brillion. Fourth quarter Adjusted EBITDA was $15.6 million, or 10.2 percent of net sales, compared to $15.6 million, or 9.1 percent of net sales, in the fourth quarter of 2014. As of Dec. 31, 2015, Accuride had $29.8 million of cash plus $46.8 million in availability under its ABL Credit Facility for total liquidity of $76.6 million.”
Fiscal Year 2015 Results
Net sales for the fiscal year ended Dec. 31, 2015 were $685.6 million. This compares with $705.2 million in the prior year, or a decrease of 2.8 percent. The net sales decrease was primarily due to lower demand at the company’s Brillion business unit, which was partially offset by the impact of higher vehicle production in the North American commercial vehicle market and by $6.5 million in net sales related to the majority investment in Gianetti. Accuride reported a loss from continuing operations attributable to stockholders of $7.5 million, or a negative $0.16 per share, for the year ended Dec. 31, 2015 compared to a loss of $0.04 per share in 2014. This included a loss of $0.09 per share related to the impairment charge at Brillion. Adjusted EBITDA from continuing operations for fiscal-year 2015 was $81.9 million, or 12.0 percent of net sales, compared to $78.0 million, or 11.1 percent of net sales, in the prior year.
Fourth Quarter Business Segment Results
Accuride Wheels
Accuride Wheels segment net sales were $98.4 million, down $3.7 million, or 3.6 percent, from the same period in 2014. This was primarily due to lower OEM demand in the quarter, which was partially offset by $6.5 million in net sales related to Gianetti. Excluding the net sales from Gianetti, the Wheels’ net sales were down $10.2 million, or 10.0 percent, from the same period in 2014. Despite this decrease, the Wheels’ Adjusted EBITDA was $20.2 million, an increase of $2.6 million, or 14.7 percent, from the fourth quarter of 2014. Wheels continued to gain share in 2015 due to its available aluminum wheel capacity and the introduction of industry-leading products in both steel and aluminum wheels.
Gunite
Gunite segment net sales of $39.2 million were up $2.6 million, or 7.1 percent, from the fourth quarter of 2014. This was primarily attributable to market share gains in aftermarket brake drums. Gunite’s Adjusted EBITDA improved to $6.2 million, from $3.5 million in the fourth quarter of 2014. Gunite gained share in 2015 as it continued to reestablish itself as a prominent wheel-end component supplier through industry-leading lead times and quality.
Brillion Iron Works
Brillion Iron Works’ fourth quarter net sales were $15.5 million, down $18.6 million, or 54.5 percent, from the fourth quarter of 2014 on lower industry demand. Brillion’s Adjusted EBITDA was a negative $2.6 million, a decrease of $4.8 million, from the fourth quarter of 2014. The net sales in the fourth quarter represented its lowest level in any quarter since 2009, as this business continues to be impacted by reduced end-market demand from customers in the oil and gas, mining and agriculture industries.
Liquidity and Debt
As of Dec. 31, 2015, total debt was $317.6 million, consisting of $307.3 million of our outstanding 9.5% senior secured notes, net of discount, and $10.3 million in short term obligations related to our majority interest in Gianetti. As of Dec. 31, 2015, Accuride had $29.8 million of cash plus $46.8 million in availability under its ABL Credit Facility, for total liquidity of $76.6 million.
