EVANSVILLE, Ind. – July 26, 2012 – Accuride Corporation (NYSE: ACW), a leading supplier of components to the commercial vehicle industry, today reported financial results for the second quarter ended June 30, 2012.
Accuride achieved second quarter 2012 net sales from continuing operations of $268.8 million, compared with $241.9 million in the same period in 2011, an increase of 11.1 percent, with all business segments reporting year-over-year-growth. The Company delivered operating income for the quarter of $9.6 million, up $1.1 million, or 13.4 percent, from the second quarter of 2011. The Company reported a net loss of $0.8 million, or $0.02 per share during the quarter. Second quarter Adjusted EBITDA increased 19.1 percent to $25.3 million, resulting in an Adjusted EBITDA margin of 9.4 percent, compared to 8.8 percent in the same quarter of 2011. As of June 30, 2012, the Company had $35.7 million of cash plus $66.5 million in availability under its ABL credit facility for total liquidity of $102.2 million.
“Accuride continues to solidly execute our ‘Fix and Grow’ strategy to drive profitable operational improvements across our core businesses,” said Accuride President and CEO Rick Dauch. “We are restoring our reputation as a dependable and capable supplier to our customers. Although industry conditions began to soften in the second quarter, we remain intensely focused on the improvement initiatives within our control, including:
The commercial vehicle industry’s underlying equipment replacement fundamentals remain strong. The industry is experiencing some near-term slowdown within the Class 8 segment. Net orders in the first quarter were lower than expected, and, in turn, order backlogs declined during the second quarter. Orders are likely to remain weak through the historically slow summer season and OEMs are adjusting build schedules in the second half of the year. Medium-duty production continues to improve at a modest pace, while trailer backlogs remain at their highest levels since 2007 and continue to increase.
Accuride Wheels segment net sales were $112.9 million, up $10.0 million, or 9.7 percent, from the same period in 2011, supported by higher year-over-year build rates. Wheels Adjusted EBITDA was $25.8 million, an increase of $4.3 million, or 19.8 percent from the second quarter of 2011. We continue to experience strong aluminum wheel demand, driven by fleet requirements to reduce operating costs and vehicle weight. We are supporting this mix shift with the additional capacity installed at our Erie, Camden and Monterrey plants in 2011. Additional planned investments in 2012-13 will allow us to continue to meet future increases in aluminum wheel demand while we upgrade our steel wheel capabilities.
Gunite segment net sales were $67.3 million, up $0.2 million, or 0.3 percent, from the second quarter of 2011 as aftermarket volume softness continued. Gunite’s Adjusted EBITDA was $1.1 million, compared to $5.7 million in the second quarter of 2011. Gunite is in the midst of a major capital investment program to upgrade casting operations, install efficient machining equipment and consolidate our manufacturing footprint. We will consolidate the machining operations of our Elkhart, Ind. and Brillion, Wisc. plants into the Rockford, Ill. facility by the end of the first quarter of next year.
Brillion Iron Works
Brillion Iron Works’ second quarter net sales were $49.3 million, up $11.1 million, or 29.1 percent, from the second quarter of 2011, while Adjusted EBITDA was $8.8 million, an increase of $6.9 million, or 363.0 percent, from the second quarter of 2011. Brillion continues to benefit from strong market demand, enabling it to selectively target higher-margin business with industrial and off-road customers. Accuride is assessing strategic options for Brillion that could potentially result in its divestiture under appropriate financial conditions.
Imperial segment second quarter net sales were $39.3 million, an increase of $5.6 million, or 16.8 percent, over the same period in 2011 due to higher OEM customer production volumes. While Imperial Adjusted EBITDA improved quarter-over-quarter to break-even in the current quarter, it was down from a positive $2.1 million in last year’s second quarter. Imperial made significant progress in eliminating its past-due position with customers. Now operationally stable, the business will return to profitability in the second half of 2012. Imperial also earned $12-15 million in new business awards that will launch with new customers in 2013.
As of June 30, 2012, total debt was $323.6 million, consisting of $303.6 million of our outstanding 9.5% senior secured notes, net of discount, and a $20.0 million draw on our ABL facility. As of June 30, 2012, the Company had $35.7 million of cash plus $66.5 million in availability under its ABL credit facility for total liquidity of $102.2 million. The Company’s strong operating cash flow enabled it to fund its capital spending of $15.2 million in the quarter.
“As we continue to execute our ‘Fix & Grow’ strategy, we are improving the operational and financial performance of our business,” Dauch said. “Given the positive long-term outlook for the North American commercial vehicle market, we remain confident that we are on track and will restore Accuride to a profitable, world-class supplier to the global commercial vehicle industry.”
Chief Financial Officer Greg Risch outlined the Company’s full-year guidance stating, “Despite near-term softness in market demand, we continue to expect 2012 net sales to be in the range of $1,000 to $1,025 million. We expect a fully diluted loss per share between $0.12 and $0.05, including a $0.06 loss per share related to the Elkhart closure, and Adjusted EBITDA ranging from $95 to $100 million for the year.”
Accuride will hold a conference call to discuss its Second Quarter 2012 financial and operational results on Friday, July 27, 2012, beginning at 9:00 a.m. Central Time. Analysts and investors may participate on the live conference call by dialing (800) 299-0148 in the United States, or (617) 801-9711 internationally, and using participant code 75071653. A live webcast of the conference call can be accessed at the Accuride Website’s Investor Information section: www.accuridecorp.com. A replay of the call will be available from July 27, 2012, at 11:00 a.m. Central Time until August 3, 2012, at 11:59 p.m. Central Time by calling (888) 286-8010 in the United States, or (617) 801-6888 internationally, using access code 76999878.
With headquarters in Evansville, Indiana, Accuride Corporation is a leading supplier of components to the commercial vehicle industry. The Company’s products include commercial vehicle wheels, wheel-end components and assemblies, truck body and chassis parts, and other commercial vehicle components. The Company’s products are marketed under its brand names, which include Accuride®, Gunite®, ImperialTM and BrillionTM. Accuride’s common stock trades on the New York Stock Exchange under the ticker symbol ACW. For more information, visit the Company’s website at https://www.accuridecorp.com.
Statements contained in this news release that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding Accuride’s expectations, hopes, beliefs, and intentions with respect to future results. Such statements are subject to the impact on Accuride’s business and prospects generally of, among other factors, market demand in the commercial vehicle industry, general economic, business and financing conditions, labor relations, governmental action, competitor pricing activity, expense volatility and other risks detailed from time to time in Accuride’s Securities and Exchange Commission filings, including those described in Item 1A of Accuride’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011. Any forward-looking statement reflects only Accuride’s belief at the time the statement is made. Although Accuride believes that the expectations reflected in these forward-looking statements are reasonable, it cannot guarantee its future results, levels of activity, performance or achievements. Except as required by law, Accuride undertakes no obligation to update any forward-looking statements to reflect events or developments after the date of this news release.
Director of Corporate Development
Phone: (812) 962-5041
Timothy G. Weir, APR
Director of Public Affairs, Communications and Marketing
Phone: (812) 962-5128