Allison Transmission Announces First Quarter 2016 Results
- Net Sales $462 million, Adjusted Net Income $109 million, Adjusted EBITDA $162 million, Adjusted Free Cash Flow $113 million or $0.66 per Diluted Share, Earnings of $0.28 per Diluted Share
- Earnings of $0.33 per Diluted Share excluding Stockholder Activism Expenses of $0.01 and Mark-to-Market Adjustments for Interest Rate Derivatives of $0.04
Adjusted Net Income, a non-GAAP financial measure, for the quarter was
First Quarter Net Sales by End Market
End Market |
Q1 2016 Net Sales ($M) |
Q1 2015 Net Sales ($M) |
% Variance |
North America On-Highway |
257 |
268 |
(4%) |
North America Hybrid-Propulsion Systems for Transit Bus |
17 |
18 |
(6%) |
North America Off-Highway |
5 |
22 |
(77%) |
Defense |
25 |
25 |
0% |
Outside North America On-Highway |
70 |
57 |
23% |
Outside North America Off-Highway |
3 |
16 |
(81%) |
Service Parts, Support Equipment & Other |
85 |
98 |
(13%) |
Total Net Sales |
462 |
504 |
(8%) |
First Quarter Highlights
North America On-Highway end market net sales were down 4 percent from the same period in 2015 principally driven by lower demand for Rugged Duty Series models and up 2 percent on a sequential basis principally driven by higher demand for Pupil Transport/Shuttle Series models.
North America Hybrid-Propulsion Systems for Transit Bus end market net sales were down 6 percent from the same period in 2015 and down 26 percent sequentially, principally driven by lower demand due to engine emissions improvements and non-hybrid alternatives that generally require a fully-automatic transmission (e.g. XNG).
North America Off-Highway end market net sales were down 77 percent from the same period in 2015 and down 55 percent on a sequential basis principally driven by lower demand from hydraulic fracturing applications.
Defense end market net sales were flat with the same period in 2015 and flat sequentially, principally driven by higher demand for Wheeled Defense offset by lower demand for Tracked Defense.
Outside North America On-Highway end market net sales were up 23 percent from the same period in 2015 principally driven by higher demand in
Outside North America Off-Highway end market net sales were down 81 percent from the same period in 2015 and down 57 percent sequentially, principally driven by lower demand in the energy and mining sectors.
Service Parts, Support Equipment & Other end market net sales were down 13 percent from the same period in 2015 principally driven by lower demand for global Off-Highway service parts partially offset by higher demand for global On-Highway service parts and down 11 percent on a sequential basis principally driven by lower demand for global service parts.
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 2016 Guidance Update
We are affirming the full year 2016 guidance ranges released to the market on
Although we are not providing specific second quarter 2016 guidance, Allison does expect second quarter net sales to be up sequentially and down from the same period in 2015.
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. |
|||||
Condensed Consolidated Statements of Operations |
|||||
(Unaudited, dollars in millions, except per share data) |
|||||
Three months ended March 31, |
|||||
2016 |
2015 |
||||
Net sales |
$ 462.1 |
$ 503.6 |
|||
Cost of sales |
247.0 |
264.4 |
|||
Gross profit |
215.1 |
239.2 |
|||
Selling, general and administrative expenses |
82.6 |
73.4 |
|||
Engineering - research and development |
21.8 |
22.2 |
|||
Loss associated with impairment of long-lived assets |
- |
1.3 |
|||
Operating income |
110.7 |
142.3 |
|||
Interest expense, net |
(34.1) |
(36.9) |
|||
Other (expense) income, net |
(0.1) |
2.8 |
|||
Income before income taxes |
76.5 |
108.2 |
|||
Income tax expense |
(28.2) |
(39.8) |
|||
Net income |
$ 48.3 |
$ 68.4 |
|||
Basic earnings per share attributable to common stockholders |
$ 0.28 |
$ 0.38 |
|||
Diluted earnings per share attributable to common stockholders |
$ 0.28 |
$ 0.38 |
Allison Transmission Holdings, Inc. |
|||||||
Condensed Consolidated Balance Sheets |
|||||||
(Unaudited, dollars in millions) |
|||||||
March 31, |
December 31, |
||||||
2016 |
2015 |
||||||
ASSETS |
|||||||
Current Assets |
|||||||
Cash and cash equivalents |
$ 299.1 |
$ 251.6 |
|||||
Accounts receivables - net of allowance for |
|||||||
doubtful accounts of $0.6 and $0.4, respectively |
219.0 |
195.0 |
|||||
Inventories |
142.7 |
141.4 |
|||||
Other current assets |
29.5 |
28.8 |
|||||
Total Current Assets |
690.3 |
616.8 |
|||||
Property, plant and equipment, net |
466.3 |
479.7 |
|||||
Intangible assets, net |
3,252.5 |
3,275.8 |
|||||
Other non-current assets |
32.1 |
36.1 |
|||||
TOTAL ASSETS |
$ 4,441.2 |
$ 4,408.4 |
|||||
LIABILITIES |
|||||||
Current Liabilities |
|||||||
Accounts payable |
$ 134.1 |
$ 126.2 |
|||||
Current portion of long term debt |
24.5 |
24.5 |
|||||
Other current liabilities |
160.9 |
153.9 |
|||||
Total Current Liabilities |
319.5 |
304.6 |
|||||
Long term debt |
2,348.3 |
2,352.7 |
|||||
Other non-current liabilities |
590.6 |
562.5 |
|||||
TOTAL LIABILITIES |
3,258.4 |
3,219.8 |
|||||
TOTAL STOCKHOLDERS' EQUITY |
1,182.8 |
1,188.6 |
|||||
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY |
$ 4,441.2 |
$ 4,408.4 |
Allison Transmission Holdings, Inc. |
|||||||||
Condensed Consolidated Statements of Cash Flows |
|||||||||
(Unaudited, dollars in millions) |
|||||||||
Three months ended March 31, |
|||||||||
2016 |
2015 |
||||||||
Net cash provided by operating activities |
$ 117.9 |
$ 91.0 |
|||||||
Net cash used for investing activities (a) |
(6.3) |
(1.2) |
|||||||
Net cash used for financing activities |
(64.8) |
(85.6) |
|||||||
Effect of exchange rate changes in cash |
0.7 |
(2.1) |
|||||||
Net increase in cash and cash equivalents |
47.5 |
2.1 |
|||||||
Cash and cash equivalents at beginning of period |
251.6 |
263.0 |
|||||||
Cash and cash equivalents at end of period |
$ 299.1 |
$ 265.1 |
|||||||
Supplemental disclosures: |
|||||||||
Interest paid |
$ 21.6 |
$ 18.5 |
|||||||
Income taxes paid |
$ 3.3 |
$ 2.5 |
|||||||
(a) Additions of long-lived assets |
$ (6.4) |
$ (1.3) |
Allison Transmission Holdings, Inc. |
|||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures |
|||||||||
(Unaudited, dollars in millions) |
|||||||||
Three months ended |
|||||||||
March 31, |
|||||||||
2016 |
2015 |
||||||||
Net income |
$ 48.3 |
$ 68.4 |
|||||||
plus: |
|||||||||
Interest expense, net |
34.1 |
36.9 |
|||||||
Cash interest expense |
(21.6) |
(18.5) |
|||||||
Income tax expense |
28.2 |
39.8 |
|||||||
Cash income taxes |
(3.3) |
(2.5) |
|||||||
Amortization of intangible assets |
23.4 |
24.3 |
|||||||
Loss associated with impairment of long-lived assets (a) |
- |
1.3 |
|||||||
Adjusted net income |
$ 109.1 |
$ 149.7 |
|||||||
Cash interest expense |
21.6 |
18.5 |
|||||||
Cash income taxes |
3.3 |
2.5 |
|||||||
Depreciation of property, plant and equipment |
20.7 |
21.4 |
|||||||
Stockholder activism expenses (b) |
3.6 |
- |
|||||||
Dual power inverter module extended coverage (c) |
1.5 |
(1.8) |
|||||||
Unrealized loss (gain) on foreign exchange (d) |
0.6 |
(2.3) |
|||||||
Unrealized gain on commodity hedge contracts (e) |
(0.5) |
(0.2) |
|||||||
Loss on repayments of long-term debt (f) |
- |
0.2 |
|||||||
Stock-based compensation expense (g) |
2.2 |
2.1 |
|||||||
Adjusted EBITDA |
$ 162.1 |
$ 190.1 |
|||||||
Net sales |
$ 462.1 |
$ 503.6 |
|||||||
Adjusted EBITDA margin |
35.1% |
37.7% |
|||||||
Net Cash Provided by Operating Activities |
$ 117.9 |
$ 91.0 |
|||||||
(Deductions) or Additions to Reconcile to Adjusted Free Cash Flow: |
|||||||||
Additions of long-lived assets |
(6.4) |
(1.3) |
|||||||
Stockholder activism expenses (b) |
1.0 |
- |
|||||||
Excess tax benefit from stock-based compensation (h) |
- |
7.8 |
|||||||
Adjusted Free Cash Flow |
$ 112.5 |
$ 97.5 |
|||||||
(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 expenses ($3.6 million)(recorded in Selling, general and administrative expenses) and payments ($1.0 million) directly associated with stockholder activism activity including the notice, and subsequent withdrawal, of director nomination and governance proposals by Ashe Capital Management, LP. |
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(c) |
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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(d) |
Represents losses (gains) (recorded in Other (expense) income, 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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(e) |
Represents unrealized gains (recorded in Other (expense) income, net) on the mark-to-market of our commodity hedge contracts. |
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(f) |
Represents losses (recorded in Other (expense) income, 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 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 or Media Relations, media@allisontransmission.com, (317) 242-5000