EVANSVILLE, Ind. – February 26, 2016 – Accuride Corporation (NYSE: ACW) – a leading supplier of components to the North American and European commercial vehicle industries – today reported financial results for the fourth quarter and fiscal year ended December 31, 2015.
“In diverse market conditions, we improved on several key financial measures in 2015, including Adjusted EBITDA, free cash flow and liquidity,” said Rick Dauch, Accuride President and CEO. “While Brillion’s results continued to be impacted by lower end-market demand, the Wheels and Gunite businesses performed exceptionally well in 2015. With their facilities operating at near-peak efficiencies, they converted this world-class operating performance and capable, available capacity into improved market share positions for wheels and wheel end components. This enabled us to generate $20 million in free cash flow in 2015 and improve our liquidity level to $77 million.
“Our investments in industry-leading technologies – such as our Steel Armor™ and newly-introduced EverSteel™ coatings – are further positioning us for success in the marketplace. In 2015, we converted 50 fleets to Accuride wheels and Gunite components. We also secured or renewed five long-term agreements with key truck OEMs and three with trailer OEs, giving us a solid three to five-year foundation from which to expand.
“Although Class 8 volumes are projected to be approximately 20 percent lower in 2016, the Trailer and Aftermarket segments – where Accuride’s share has increased – are expected to be stable. In addition, 2016 will see the top-line benefit of our new majority stake in Gianetti Ruote, which serves Europe’s steadily-growing commercial vehicle industry. Now, more than ever, Accuride is a more competitive and strategically vital supplier to our customers in North America and Europe. We are confident our improved product and geographic platforms will lead to growth and increased stakeholder value.”
Fourth quarter 2015 net sales were $153.1 million, a decrease of 11.4 percent from the year ago period. This was driven primarily by the lower demand in our Brillion segment and lower raw material prices, which was partially offset by $6.5 million in net sales related to our majority investment in Gianetti. Accuride’s operating loss was $1.6 million, which was impacted by a $4.4 million non-cash goodwill impairment charge related to Brillion and a $1.3 million loss related to the results at Gianetti. The Company reported a net loss from continuing operations attributable to stockholders of $14.9 million, or a negative $0.31 per share, during the quarter. This included a loss of $0.09 per share related to the impairment charge at Brillion. Fourth quarter Adjusted EBITDA was $15.6 million, or 10.2 percent of net sales, compared to $15.6 million, or 9.1 percent of net sales, in the fourth quarter of 2014. As of December 31, 2015, Accuride had $29.8 million of cash plus $46.8 million in availability under its ABL Credit Facility for total liquidity of $76.6 million.
Net sales for the fiscal year ended December 31, 2015 were $685.6 million. This compares with $705.2 million in the prior year, or a decrease of 2.8 percent. The net sales decrease was primarily due to lower demand at our Brillion business unit, which was partially offset by the impact of higher vehicle production in the North American commercial vehicle market and by $6.5 million in net sales related to our majority investment in Gianetti. Accuride reported a loss from continuing operations attributable to stockholders of $7.5 million, or a negative $0.16 per share, for the year ended December 31, 2015 compared to a loss of $0.04 per share in 2014. This included a loss of $0.09 per share related to the impairment charge at Brillion. Adjusted EBITDA from continuing operations for fiscal-year 2015 was $81.9 million, or 12.0 percent of net sales, compared to $78.0 million, or 11.1 percent of net sales, in the prior year.
Accuride Wheels segment net sales were $98.4 million, down $3.7 million, or 3.6 percent, from the same period in 2014. This was primarily due to lower OEM demand in the quarter, which was partially offset by $6.5 million in net sales related to Gianetti. Excluding the net sales from Gianetti, the Wheels’ net sales were down $10.2 million, or 10.0 percent, from the same period in 2014. Despite this decrease, the Wheels’ Adjusted EBITDA was $20.2 million, an increase of $2.6 million, or 14.7 percent, from the fourth quarter of 2014. Wheels continued to gain share in 2015 due to its available aluminum wheel capacity and the introduction of industry-leading products in both steel and aluminum wheels.
Gunite segment net sales of $39.2 million were up $2.6 million, or 7.1 percent, from the fourth quarter of 2014. This was primarily attributable to market share gains in aftermarket brake drums. Gunite’s Adjusted EBITDA improved to $6.2 million, from $3.5 million in the fourth quarter of 2014. Gunite gained share in 2015 as it continued to reestablish itself as a prominent wheel-end component supplier through industry-leading lead times and quality.
Brillion Iron Works’ fourth quarter net sales were $15.5 million, down $18.6 million, or 54.5 percent, from the fourth quarter of 2014 on lower industry demand. Brillion’s Adjusted EBITDA was a negative $2.6 million, a decrease of $4.8 million, from the fourth quarter of 2014. The net sales in the fourth quarter represented its lowest level in any quarter since 2009, as this business continues to be impacted by reduced end-market demand from customers in the oil and gas, mining and agriculture industries.
As of December 31, 2015, total debt was $317.6 million, consisting of $307.3 million of our outstanding 9.5% senior secured notes, net of discount, and $10.3 million in short term obligations related to our majority interest in Gianetti. As of December 31, 2015, Accuride had $29.8 million of cash plus $46.8 million in availability under its ABL Credit Facility, for total liquidity of $76.6 million.
Accuride expects 2016 revenue to be in the range of $650 million to $700 million, with Adjusted EBITDA in the range $65 million to $80 million. Accuride also expects free cash flow for 2016 to be roughly breakeven. The Company is basing these expectations for its 2016 guidance on the following projections for North American commercial vehicle production and other key assumptions for the year:
Accuride will host a conference call to discuss the financial and operational results of its Fourth Quarter and Full-Year Fiscal 2015 on Friday, February 26, 2016, beginning at 9:00 a.m. CST. Analysts and investors may participate on the conference call by dialing (855) 542-4217 in the United States, or (412) 455-6081 internationally, and using participant code 54646527. A live webcast of the conference call can be accessed via the Investors section of the company’s website – www.AccurideCorp.com/investors. A replay will be available from February 26, 2016, at 12:00 p.m. CST until 11:59 p.m. CST, March 4, 2016, by calling (855) 859-2056 in the United States, or (404) 537-3406 internationally, using access code 54646527.
With headquarters in Evansville, Ind., USA, Accuride Corporation is a leading supplier of components to the North American and European commercial vehicle industries. The company’s products include commercial vehicle wheels; wheel-end components and assemblies; and specialty cast-iron components for a range of agricultural, construction and mining, and oil and gas equipment applications. The company’s products are marketed ude Wheel End Solutions™, Gunite®, Gianetti Ruote™ and Brillion™. 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, 2014. 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.
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