Allison Transmission Announces First Quarter 2015 Results
Adjusted Net Income, a non-GAAP financial measure, for the quarter was
First Quarter Net Sales by End Market
End Market |
Q1 2015 Net Sales ($M) |
Q1 2014 Net Sales ($M) |
% Variance |
North America On-Highway |
268 |
233 |
15% |
North America Hybrid-Propulsion Systems for Transit Bus |
18 |
24 |
(25%) |
North America Off-Highway |
22 |
12 |
83% |
Defense |
25 |
34 |
(26%) |
Outside North America On-Highway |
57 |
64 |
(11%) |
Outside North America Off-Highway |
16 |
21 |
(24%) |
Service Parts, Support Equipment & Other |
98 |
106 |
(8%) |
Total Net Sales |
504 |
494 |
2% |
First Quarter Highlights
North America On-Highway end market net sales were up 15 percent from the same period in 2014 and up 5 percent on a sequential basis principally driven by higher demand for Rugged Duty Series models.
North America Hybrid-Propulsion Systems for Transit Bus end market net sales were down 25 percent from the same period in 2014 principally driven by lower demand due to engine emissions improvements and non-hybrid alternatives that generally require a fully-automatic transmission (e.g. xNG), and flat sequentially.
North America Off-Highway end market net sales were up 83 percent from the same period in 2014 principally driven by higher demand from hydraulic fracturing applications and down 39 percent on a sequential basis principally driven by lower demand from hydraulic fracturing applications.
Defense end market net sales were down 26 percent from the same period in 2014 and down 34 percent sequentially principally driven by reductions in U.S. defense spending to longer term averages experienced during periods without active conflicts.
Outside North America On-Highway end market net sales were down 11 percent from the same period in 2014 principally driven by weakness in
Outside North America Off-Highway end market net sales were down 24 percent from the same period in 2014 principally driven by lower demand in the mining sector and down 16 percent sequentially principally driven by lower demand in the
Service Parts, Support Equipment & Other end market net sales were down 8 percent from the same period in 2014 principally driven by lower demand for
Gross profit for the quarter was
Selling, general and administrative expenses for the quarter were
Engineering – research and development expenses for the quarter were
First Quarter Non-GAAP Financial Measures
Adjusted Net Income for the quarter was
Adjusted EBITDA for the quarter was
Adjusted Free Cash Flow for the quarter was
Full Year 2015 Guidance
Our 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
Although we are not providing specific second quarter 2015 guidance, Allison does expect second quarter net sales to be lower than the same period in 2014. The anticipated year-over-year decrease in second quarter net sales is expected to occur due to higher demand in the global On-Highway end markets being more than offset by lower demand in other end markets.
Conference Call and Webcast
The company will host a conference call at
For those unable to participate in the conference call, a replay will be available from
About
Forward-Looking Statements
This press release contains forward-looking statements. All statements other than statements of historical fact contained in this press release are forward-looking statements, including all statements regarding future financial results. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "plans," "project," "anticipate," "believe," "estimate," "predict," "intend," "forecast," "could," "potential," "continue" or the negative of these terms or other similar terms or phrases. Forward-looking statements are not guarantees of future performance and involve known and unknown risks. Factors which may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made include, but are not limited to: risks related to our substantial indebtedness; our participation in markets that are competitive; the highly cyclical industries in which certain of our end users operate; the failure of markets outside
Use of Non-GAAP Financial Measures
This press release contains information about Allison's financial results which are not presented in accordance with accounting principles generally accepted in
Attachment
- Condensed Consolidated Statements of Operations
- Condensed Consolidated Balance Sheets
- Condensed Consolidated Statements of Cash Flows
- Reconciliation of GAAP to Non-GAAP Financial Measures
Allison Transmission Holdings, Inc. |
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Condensed Consolidated Statements of Operations |
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(Unaudited, dollars in millions, except per share data) |
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Three months ended March 31, |
|||||
2015 |
2014 |
||||
Net sales |
$ 503.6 |
$ 493.6 |
|||
Cost of sales |
264.4 |
271.1 |
|||
Gross profit |
239.2 |
222.5 |
|||
Selling, general and administrative expenses |
73.4 |
83.2 |
|||
Engineering - research and development |
22.2 |
24.5 |
|||
Loss associated with impairment of long-lived assets |
1.3 |
- |
|||
Operating income |
142.3 |
114.8 |
|||
Interest expense, net |
(36.9) |
(35.1) |
|||
Other income (expense), net |
2.8 |
(0.4) |
|||
Income before income taxes |
108.2 |
79.3 |
|||
Income tax expense |
(39.8) |
(27.2) |
|||
Net income |
$ 68.4 |
$ 52.1 |
|||
Basic earnings per share attributable to |
|||||
common stockholders |
$ 0.38 |
$ 0.29 |
|||
Diluted earnings per share attributable to |
|||||
common stockholders |
$ 0.38 |
$ 0.28 |
Allison Transmission Holdings, Inc. |
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Condensed Consolidated Balance Sheets |
|||||||
(Unaudited, dollars in millions) |
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March 31, |
December 31, |
||||||
2015 |
2014 |
||||||
ASSETS |
|||||||
Current Assets |
|||||||
Cash and cash equivalents |
$ 265.1 |
$ 263.0 |
|||||
Accounts receivables - net of allowance for |
|||||||
doubtful accounts of $0.4 and $0.3, respectively |
231.3 |
207.4 |
|||||
Inventories |
160.9 |
143.5 |
|||||
Deferred income taxes, net |
113.0 |
119.7 |
|||||
Other current assets |
25.0 |
24.4 |
|||||
Total Current Assets |
795.3 |
758.0 |
|||||
Property, plant and equipment, net |
495.6 |
514.6 |
|||||
Intangible assets, net |
3,428.7 |
3,453.0 |
|||||
Deferred income taxes, net |
1.3 |
1.3 |
|||||
Other non-current assets |
68.6 |
77.3 |
|||||
TOTAL ASSETS |
$ 4,789.5 |
$ 4,804.2 |
|||||
LIABILITIES |
|||||||
Current Liabilities |
|||||||
Accounts payable |
$ 157.1 |
$ 151.7 |
|||||
Current portion of long term debt |
17.9 |
17.9 |
|||||
Other current liabilities |
159.2 |
176.3 |
|||||
Total Current Liabilities |
334.2 |
345.9 |
|||||
Long term debt |
2,450.9 |
2,502.6 |
|||||
Other non-current liabilities |
585.4 |
557.9 |
|||||
TOTAL LIABILITIES |
3,370.5 |
3,406.4 |
|||||
TOTAL STOCKHOLDERS' EQUITY |
1,419.0 |
1,397.8 |
|||||
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY |
$ 4,789.5 |
$ 4,804.2 |
Allison Transmission Holdings, Inc. |
|||||||||
Condensed Consolidated Statements of Cash Flows |
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(Unaudited, dollars in millions) |
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Three months ended March 31, |
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2015 |
2014 |
||||||||
Net cash provided by operating activities |
$ 80.1 |
$ 98.6 |
|||||||
Net cash used for investing activities (a) |
(1.2) |
(15.1) |
|||||||
Net cash used for financing activities |
(85.6) |
(105.7) |
|||||||
Effect of exchange rate changes in cash |
8.8 |
(2.6) |
|||||||
Net increase (decrease) in cash and cash equivalents |
2.1 |
(24.8) |
|||||||
Cash and cash equivalents at beginning of period |
263.0 |
184.7 |
|||||||
Cash and cash equivalents at end of period |
$ 265.1 |
$ 159.9 |
|||||||
Supplemental disclosures: |
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Interest paid |
$ 18.5 |
$ 29.4 |
|||||||
Income taxes paid |
$ 2.5 |
$ 2.1 |
|||||||
(a) Additions of long-lived assets |
$ (1.3) |
$ (11.1) |
Allison Transmission Holdings, Inc. |
||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures |
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(Unaudited, dollars in millions) |
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Three months ended |
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March 31, |
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2015 |
2014 |
|||||||
Net income |
$ 68.4 |
$ 52.1 |
||||||
plus: |
||||||||
Interest expense, net |
36.9 |
35.1 |
||||||
Cash interest expense |
(18.5) |
(29.4) |
||||||
Income tax expense |
39.8 |
27.2 |
||||||
Cash income taxes |
(2.5) |
(2.1) |
||||||
Amortization of intangible assets |
24.3 |
24.7 |
||||||
Loss associated with impairment of long-lived assets (a) |
1.3 |
- |
||||||
Public offering expenses (b) |
- |
0.3 |
||||||
Adjusted net income |
$ 149.7 |
$ 107.9 |
||||||
Cash interest expense |
18.5 |
29.4 |
||||||
Cash income taxes |
2.5 |
2.1 |
||||||
Depreciation of property, plant and equipment |
21.4 |
23.3 |
||||||
Unrealized gain on foreign exchange (c) |
(2.3) |
(0.3) |
||||||
Dual power inverter module extended coverage (d) |
(1.8) |
- |
||||||
Unrealized (gain) loss on commodity hedge contracts (e) |
(0.2) |
0.1 |
||||||
Loss on repayments of long-term debt (f) |
0.2 |
- |
||||||
Stock-based compensation expense (g) |
2.1 |
3.3 |
||||||
Adjusted EBITDA |
$ 190.1 |
$ 165.8 |
||||||
Adjusted EBITDA excluding technology-related license expenses (h) |
$ 190.1 |
$ 169.1 |
||||||
Net sales |
$ 503.6 |
$ 493.6 |
||||||
Adjusted EBITDA margin |
37.7% |
33.6% |
||||||
Adjusted EBITDA margin excluding technology-related license expenses (h) |
37.7% |
34.3% |
||||||
Net Cash Provided by Operating Activities |
$ 80.1 |
$ 98.6 |
||||||
(Deductions) or Additions to Reconcile to Adjusted Free Cash Flow: |
||||||||
Additions of long-lived assets |
(1.3) |
(11.1) |
||||||
Excess tax benefit from stock-based compensation (i) |
7.8 |
5.0 |
||||||
Technology-related license expenses (h) |
- |
3.3 |
||||||
Adjusted Free Cash Flow |
$ 86.6 |
$ 95.8 |
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(a) |
Represents a charge associated with the impairment of long-lived assets related to the production of the H3000 and H4000 hybrid-propulsion systems. |
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(b) |
Represents fees and expenses (recorded in Other income (expense), net) related to our secondary offering in February 2014. |
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(c) |
Represents gains (recorded in Other income (expense), net) on the mark-to-market of our foreign currency hedge contracts and on intercompany financing transactions related to investments in plant assets for our India facility. |
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(d) |
Represents an adjustment (recorded in Selling, general and administrative expenses) associated with the Dual Power Inverter Module ("DPIM") extended coverage program liability. The DPIM liability will continue to be reviewed for any changes in estimates as additional claims data and field information become available. |
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(e) |
Represents unrealized (gains) losses (recorded in Other income (expense), net) on the mark-to-market of our commodity hedge contracts. |
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(f) |
Represents losses (recorded in Other income (expense), net) realized on the repayments of Allison Transmission, Inc.'s, our wholly owned subsidiary, long-term debt. |
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(g) |
Represents employee stock compensation expense (recorded in Cost of sales, Selling, general and administrative expenses, and Engineering – research and development). |
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(h) |
Represents payments (recorded in Engineering – research and development) for licenses to expand our position in transmission technologies. |
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(i) |
Represents the amount of tax benefit (recorded in Income tax expense) related to stock-based compensation adjusted from cash flows from operating activities to cash flows from financing activities. |
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SOURCE
Investor Relations, ir@allisontransmission.com, (317) 242-3078, Media Relations, media@allisontransmission.com, (317) 242-5000