American Axle & Manufacturing Holdings Inc. (AAM), has reported its financial results for the fourth quarter and full year 2021.  AAM also provided its full year 2022 financial outlook and 2022-2024 new business backlog. 

Fourth Quarter 2021 Results

• Sales of $1.24 billion
• Net loss attributable to AAM of $(46.3) million, or (3.7)% of sales, which includes the impact of a non-cash pre-tax pension settlement charge of $42.3 million
• Adjusted EBITDA of $164.6 million, or 13.3% of sales 
• Diluted loss per share of $(0.41); Adjusted loss per share of $(0.09)
• Net cash provided by operating activities of $102.4 million; Adjusted free cash flow of $43.6 million

Full Year 2021 Results

• Sales of $5.16 billion
• Net income attributable to AAM of $5.9 million, or 0.1% of sales 
• Adjusted EBITDA of $833.3 million, or 16.2% of sales 
• Diluted earnings per share of $0.05; Adjusted earnings per share of $0.93
• Net cash provided by operating activities of $538.4 million; Adjusted free cash flow of $422.9 million

“AAM delivered strong operational performance in 2021 while generating a company record adjusted free cash flow,” said AAM’s Chairman and CEO, David C. Dauch. “These results demonstrate our focus on efficiency and optimization despite ongoing production volatility. In the pivot to electrification, AAM continues to bring the future faster with industry-leading electric drive technology and future electrification business awards that comprise approximately one-third of our new business backlog.”  

AAM’s sales in the fourth quarter of 2021 were $1.24 billion as compared to $1.44 billion in the fourth quarter of 2020. AAM estimates sales for the fourth quarter of 2021 were unfavorably impacted by the semiconductor chip shortage that is impacting the automotive industry by approximately $137 million. 

AAM’s sales for full year 2021 were $5.16 billion as compared to $4.71 billion for full year 2020. AAM estimates sales for the full year 2021 were unfavorably impacted by the semiconductor shortage by approximately $607 million. 

AAM’s net loss in the fourth quarter of 2021 was $(46.3) million, or $(0.41) per share, as compared to a net income of $36.0 million, or $0.30 per share in the fourth quarter of 2020.  AAM’s net income for full year 2021 was $5.9 million, or $0.05 per share, as compared to a net loss of $(561.3) million, or $(4.96) per share, for full year 2020.

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, debt refinancing and redemption costs, loss on sale of business, impairment charges, pension settlements, unrealized gains or losses on equity securities and non-recurring items.  In the fourth quarter of 2021, Adjusted EBITDA was $164.6 million, or 13.3% of sales, as compared to $261.5 million, or 18.2% of sales, in the fourth quarter of 2020. AAM estimates Adjusted EBITDA in the fourth quarter of 2021 was unfavorably impacted by lower sales as a result of the semiconductor shortage by approximately $39 million. 

For full year 2021, AAM’s Adjusted EBITDA was $833.3 million, or 16.2% of sales, as compared to $719.8 million, or 15.3% of sales, in 2020. AAM estimates Adjusted EBITDA for the full year 2021 was unfavorably impacted by lower sales as a result of the semiconductor chip shortage by approximately $188 million. 

AAM’s net cash provided by operating activities for the fourth quarter of 2021 was $102.4 million as compared to $208.3 million for the fourth quarter of 2020.  AAM’s net cash provided by operating activities for full year 2021 was $538.4 million as compared to $454.7 million for full year 2020. 

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 cash payments related to the Malvern fire, including payments for capital expenditures, net of recoveries. AAM’s adjusted free cash flow for the fourth quarter of 2021 was $43.6 million as compared to $172.7 million for the fourth quarter of 2020.  AAM’s Adjusted free cash flow for full year 2021 was $422.9 million as compared to $311.4 million for full year 2020.

AAM’s 2022 Financial Outlook

AAM’s full year 2022 financial targets are as follows:   

• AAM is targeting sales in the range of $5.6 – $5.9 billion, which includes an additional $150 – $200 million increase in index-related metal market customer pass-throughs and foreign currency versus 2021 
• AAM is targeting Adjusted EBITDA in the range of $800 – $875 million
  • Reflects the impact of increased R&D spending to support new programs and electrification growth opportunities
• AAM is targeting Adjusted free cash flow in the range of $300 – $375 million; this target assumes capital spending of approximately 3.5% – 4.0% of sales

These targets are based on the following assumptions for 2022: 

• North American light vehicle production of approximately 14.8 – 15.2 million units 
• Current customer production and launch schedules and operating environment

AAM’s 2022-2024 New Business Backlog

AAM’s gross new and incremental business backlog launching from 2022-2024 is estimated at approximately $700 million in future annual sales. AAM expects the launch cadence of the three-year backlog to be approximately $175 million in 2022, $325 million in 2023 and $200 million in 2024. Electrification mix approximates 35% of AAM’s new business backlog versus 15% in the prior backlog (2021-2023).