American Axle & Manufacturing Holdings (AAM) has reported its financial results for the first quarter 2018 and confirmed AAM’s full year 2018 financial outlook.
AAM’s sales in the first quarter of 2018 increased to $1.86 billion as compared to $1.05 billion in the first quarter of 2017.
AAM’s net income in the first quarter of 2018 was $89.4 million, or 78 cents per share as compared to net income of $78.4 million, or 99 cents per share in the first quarter of 2017.
“AAM’s first quarter financial performance was highlighted by continued strength in our end markets, realization of our new business backlog and operational excellence on a global basis,” said AAM’s Chairman and CEO, David Dauch. “We are off to a great start in achieving our 2018 financial targets, while continuing to focus on critical launch and acquisition integration activities during the year.”
AAM defines Adjusted earnings per share to be diluted earnings per share excluding the impact of restructuring and acquisition-related costs, debt refinancing and redemption costs and non-recurring items, including the tax effect thereon. Adjusted earnings per share in the first quarter of 2018 were 98 cents compared to $1.03 in the first quarter of 2017.
AAM defines EBITDA to be earnings before interest expense, income taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA excluding the impact of restructuring and acquisition-related costs and debt refinancing and redemption costs. In the first quarter of 2018, Adjusted EBITDA was $317 million, or 17.1 percent of sales, as compared to $183.6 million, or 17.5 percent of sales, in the first quarter of 2017.
AAM’s net cash provided by operating activities for the first quarter of 2018 was $66.9 million as compared to $62.3 million in the first quarter of 2017.
AAM defines free cash flow to be net cash provided by operating activities less capital expenditures net of proceeds from the sale of property, plant and equipment. Adjusted free cash flow is defined as free cash flow excluding the impact of cash payments for restructuring and acquisition-related costs and settlements of pre-existing accounts payable balances with acquired entities. AAM’s Adjusted free cash flow for the first quarter of 2018 was a seasonal use of $41.7 million.
AAM Sells Aftermarket Business of Powertrain Business Unit
In April 2018, AAM sold the aftermarket business of our Powertrain business unit to Hidden Harbor Capital Partners. Cash proceeds from the sale of these non-core assets were approximately $50 million. The impact of this sale will be recorded in the Company’s second quarter 2018 financial results. AAM acquired the business with its 2016 acquisition of MPG Group, which included a number of consolidated brands such as HHI, Grede, Cloyes, Metaldyne, Jernberg, Impact Forge, NovoCast and FormTech. For more information on this sale, click here.
AAM’s Full Year 2018 Outlook
AAM is confirming its full year 2018 financial outlook, which includes:
- AAM is targeting sales of approximately $7 billion in 2018. This sales projection is based on the anticipated launch schedule of programs in AAM’s new and incremental business backlog and the assumption that the U.S. Seasonally Adjusted Annual Rate of sales will be in the range of 16.8 million to 17 million light vehicle units in 2018.
- AAM is targeting an Adjusted EBITDA margin in the range of 17.5 percent to 18 percent of sales in 2018.
- AAM is targeting Adjusted free cash flow of approximately 5 percent of sales in 2018.