INDIANAPOLIS – Allison Transmission has reported net sales for the first quarter of $504 million, a 2 percent increase from the same period in 2014. The company said this increase in net sales was principally driven by the continued recovery in the North America On-Highway end-market, higher demand in the North America Off-Highway end-market and price increases on certain products partially offset by lower demand in other end markets.
Net sales improved on a year-over-year basis for the sixth consecutive quarter led by the continued recovery in the North America On-Highway end market, higher demand in the North America Off-Highway end market and price increases on certain products partially offset by lower demand in other end markets. During the first quarter Allison started to experience the unfavorable impact of lower energy prices in the global Off-Highway and Service Parts, Support Equipment & Other end markets. The company said it continued its prudent and well-defined approach to capital allocation during the first quarter by settling $35 million of share repurchases, paying a dividend of $0.15 per share, repaying $52 million of debt and commencing a refinancing of Allison’s Senior Notes due 2019.
Given the increased level of uncertainty and lack of near-term visibility in the global Off-Highway and Service Parts, Support Equipment & Other end markets, the company updated its full-year net sales guidance to a decrease in the range of 4 to 8 percent year-over-year. The company said it also plans to execute several initiatives to align costs and programs across its businesses with those challenging end market conditions.
Gross profit for the quarter was $239 million, an increase of 8 percent from $223 million for the same period in 2014. The increase in gross profit from the same period in 2014 was principally driven by price increases on certain products and increased net sales.
Adjusted Net Income for the quarter was $150 million, compared to $108 million for the same period in 2014, an increase of $42 million. The company’s updated full year 2015 guidance includes a year-over-year net sales decrease in the range of 4 to 8 percent, an adjusted EBITDA margin in the range of 34.5 to 35.5 percent, an adjusted free cash flow in the range of $460 to $510 million, capital expenditures in the range of $60 to $70 million and cash income taxes in the range of $10 to $15 million.
