American Axle & Manufacturing Holdings Inc. (AAM) has reported its financial results for the fourth quarter and full year 2019. AAM also provided its full year 2020 financial outlook and 2020-2022 new business backlog.
Fourth Quarter 2019 Results
- Sales of $1.43 billion
- Net loss attributable to AAM of $454.4 million, or (31.8)% of sales, which includes the impact of a pre-tax goodwill impairment of $440.0 million
- Adjusted EBITDA of $193.5 million, or 13.5% of sales
- Diluted loss per share of $4.04; Adjusted earnings per share of $0.13
- Net cash provided by operating activities of $181.0 million; Adjusted free cash flow of $116.5 million
- AAM’s fourth quarter financial results were unfavorably impacted by a work stoppage at our largest customer (GM work stoppage)
Full Year 2019 Results
- Sales of $6.53 billion
- Net loss attributable to AAM of $484.5 million, or (7.4)% of sales, which includes the impact of pre-tax impairment charges of $665.0 million
- Adjusted EBITDA of $970.3 million, or 14.9% of sales
- Diluted loss per share of $4.31; Adjusted earnings per share of $1.62
- Net cash provided by operating activities of $559.6 million; Adjusted free cash flow of $207.8 million
- AAM’s full-year financial results were unfavorably impacted by the GM work stoppage
“AAM delivered solid operating and cash flow performance in 2019, as we adjusted our operations for lower global production volumes and the GM work stoppage,” said AAM’s Chairman and Chief Executive Officer David Dauch. “In 2020, we are focused on further free cash flow generation and debt reduction while continuing to invest in advanced propulsion technologies to drive future profitable growth for AAM.”
AAM’s 2020 Financial Outlook
AAM’s full year 2020 financial targets are as follows:
- AAM is targeting sales in the range of $5.8 – $6.0 billion, which includes lower metal market passthroughs to customers at current market rates.
- AAM is targeting Adjusted EBITDA margin of approximately 16% of sales
- AAM is targeting Adjusted free cash flow of approximately $300 million. This target assumes capital spending of approximately 5.5% of sales.
- These targets are based on the following industry production assumptions for 2020:
- North American light vehicle production of 16.3 to 16.5 million units
- European light vehicle production down 1% to 3% compared to 2019
- China light vehicle production down 3% to 5% compared to 2019
AAM’s 2020-2022 New Business Backlog
AAM’s gross new and incremental business backlog launching from 2020-2022 is estimated at approximately $750 million in future annual sales. AAM expects the launch cadence of the three-year backlog to be approximately $400 million in 2020, $200 million in 2021 and $150 million in 2022. AAM’s updated backlog estimate contemplates the sale of the U.S. iron casting operations completed in December 2019.