Allison Transmission Announces Fourth Quarter and Full Year 2015 Results
- Net Sales $478 million, Adjusted Net Income $123 million, Adjusted EBITDA $170 million, Adjusted Free Cash Flow $146 million or $0.85 per Diluted Share
- Earnings of $0.37 per Diluted Share excluding Trade Name Impairment Charge
- Net Sales $1,986 million, Adjusted Net Income $493 million, Adjusted EBITDA $720 million, Adjusted Free Cash Flow $514 million or $2.90 per Diluted Share
- Earnings of $1.36 per Diluted Share excluding Trade Name Impairment and Environmental Remediation Charges
Adjusted Net Income, a non-GAAP financial measure, for the quarter was
Fourth Quarter Net Sales by End Market
End Market |
Q4 2015 Net Sales |
Q4 2014 Net Sales |
% Variance |
North America On-Highway |
252 |
256 |
(2%) |
North America Hybrid-Propulsion Systems for |
23 |
17 |
35% |
North America Off-Highway |
11 |
36 |
(69%) |
Defense |
25 |
38 |
(34%) |
Outside North America On-Highway |
65 |
65 |
0% |
Outside North America Off-Highway |
7 |
19 |
(63%) |
Service Parts, Support Equipment & Other |
95 |
113 |
(16%) |
Total Net Sales |
478 |
544 |
(12%) |
Fourth Quarter Highlights
North America On-Highway end market net sales were down 2 percent from the same period in 2014 and down 4 percent on a sequential basis principally driven by lower demand for Pupil Transport/Shuttle Series models.
North America Hybrid-Propulsion Systems for Transit Bus end market net sales were up 35 percent from the same period in 2014 and up 92 percent sequentially principally driven by intra-year movement in the timing of orders.
North America Off-Highway end market net sales were down 69 percent from the same period in 2014 and down 8 percent on a sequential basis principally driven by lower demand from hydraulic fracturing applications.
Defense end market net sales were down 34 percent from the same period in 2014 and down 26 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 flat with the same period in 2014 principally driven by higher demand in
Outside North America Off-Highway end market net sales were down 63 percent from the same period in 2014 principally driven by lower demand in the energy sector and up 75 percent sequentially principally driven by higher demand in the energy and mining sectors.
Service Parts, Support Equipment & Other end market net sales were down 16 percent from the same period in 2014 and down 7 percent on a sequential basis principally driven by lower demand for North America Off-Highway service parts partially offset by higher demand for global On-Highway 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
During the fourth quarter of 2015, we recorded a trade name impairment charge of
Fourth 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
2016 Guidance Update
Allison expects 2016 net sales to be in the range of down 6.5 to 9.5 percent compared to 2015, an Adjusted EBITDA margin in the range of 32.5 to 34 percent, and an Adjusted Free Cash Flow in the range of
Our 2016 net sales guidance reflects expectations for tempering demand conditions in the North America On-Highway end market, no meaningful relief from the global Off-Highway end markets challenges and divergent global economic environments. Allison's 2016 net sales outlook also assumes previously considered reductions in demand for North America Hybrid-Propulsion Systems for Transit Bus due to engine emissions improvements and non-hybrid alternatives.
Although we are not providing specific first quarter 2016 guidance, Allison does expect first quarter net sales to be lower than the first and fourth quarters of 2015. The anticipated year-over-year decrease in first quarter net sales is expected to occur principally due to lower demand in the North America On-Highway and global Off-Highway 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. |
||||||||
Condensed Consolidated Statements of Operations |
||||||||
(Unaudited, dollars in millions, except per share data) |
||||||||
Three months ended December 31, |
Year ended December 31, |
|||||||
2015 |
2014 |
2015 |
2014 |
|||||
Net sales |
$ 478.2 |
$ 544.4 |
$ 1,985.8 |
$ 2,127.4 |
||||
Cost of sales |
256.0 |
288.8 |
1,052.0 |
1,151.5 |
||||
Gross profit |
222.2 |
255.6 |
933.8 |
975.9 |
||||
Selling, general and administrative expenses |
81.5 |
88.8 |
317.1 |
344.6 |
||||
Engineering - research and development |
23.5 |
33.6 |
92.5 |
103.8 |
||||
Trade name impairment |
80.0 |
- |
80.0 |
- |
||||
Environmental remediation |
- |
- |
14.0 |
- |
||||
Loss associated with impairment of long-lived assets |
- |
15.4 |
1.3 |
15.4 |
||||
Operating income |
37.2 |
117.8 |
428.9 |
512.1 |
||||
Interest expense, net |
(20.8) |
(37.4) |
(114.5) |
(138.4) |
||||
Premiums and expenses on tender offer and |
- |
- |
(25.3) |
- |
||||
Other income (expense), net |
3.3 |
(2.6) |
(0.3) |
(5.6) |
||||
Income before income taxes |
19.7 |
77.8 |
288.8 |
368.1 |
||||
Income tax expense |
(6.7) |
(27.3) |
(106.5) |
(139.5) |
||||
Net income |
$ 13.0 |
$ 50.5 |
$ 182.3 |
$ 228.6 |
||||
Basic earnings per share attributable to |
||||||||
common stockholders |
$ 0.08 |
$ 0.28 |
$ 1.03 |
$ 1.27 |
||||
Diluted earnings per share attributable to |
||||||||
common stockholders |
$ 0.08 |
$ 0.28 |
$ 1.03 |
$ 1.25 |
||||
Allison Transmission Holdings, Inc. |
||||||||
Condensed Consolidated Balance Sheets |
||||||||
(Unaudited, dollars in millions) |
||||||||
December 31, |
December 31, |
|||||||
2015 |
2014 |
|||||||
ASSETS |
||||||||
Current Assets |
||||||||
Cash and cash equivalents |
$ 251.6 |
$ 263.0 |
||||||
Accounts receivables - net of allowance for |
||||||||
doubtful accounts of$0.4and $0.3, respectively |
195.0 |
207.4 |
||||||
Inventories |
141.4 |
143.5 |
||||||
Other current assets |
28.8 |
24.4 |
||||||
Total Current Assets |
616.8 |
638.3 |
||||||
Property, plant and equipment, net |
479.7 |
514.6 |
||||||
Intangible assets, net |
3,275.8 |
3,453.0 |
||||||
Deferred income taxes, net |
1.9 |
2.3 |
||||||
Other non-current assets |
34.2 |
48.0 |
||||||
TOTAL ASSETS |
$ 4,408.4 |
$ 4,656.2 |
||||||
LIABILITIES |
||||||||
Current Liabilities |
||||||||
Accounts payable |
$ 126.2 |
$ 151.7 |
||||||
Current portion of long term debt |
24.5 |
17.9 |
||||||
Other current liabilities |
150.8 |
176.3 |
||||||
Total Current Liabilities |
301.5 |
345.9 |
||||||
Long term debt |
2,352.7 |
2,473.3 |
||||||
Other non-current liabilities |
565.6 |
439.2 |
||||||
TOTAL LIABILITIES |
3,219.8 |
3,258.4 |
||||||
TOTAL STOCKHOLDERS' EQUITY |
1,188.6 |
1,397.8 |
||||||
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY |
$ 4,408.4 |
$ 4,656.2 |
||||||
Allison Transmission Holdings, Inc. |
||||||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||||||
(Unaudited, dollars in millions) |
||||||||||||
Three months ended December 31, |
Year ended December 31, |
|||||||||||
2015 |
2014 |
2015 |
2014 |
|||||||||
Net cash provided by operating activities |
$ 173.8 |
$ 140.9 |
$ 563.8 |
$ 556.9 |
||||||||
Net cash used for investing activities (a) |
(27.9) |
(26.5) |
(59.7) |
(67.9) |
||||||||
Net cash used for financing activities |
(43.5) |
(66.5) |
(528.7) |
(424.1) |
||||||||
Effect of exchange rate changes in cash |
0.8 |
7.0 |
13.2 |
13.4 |
||||||||
Net increase (decrease) in cash and cash equivalents |
103.2 |
54.9 |
(11.4) |
78.3 |
||||||||
Cash and cash equivalents at beginning of period |
148.4 |
208.1 |
263.0 |
184.7 |
||||||||
Cash and cash equivalents at end of period |
$ 251.6 |
$ 263.0 |
$ 251.6 |
$ 263.0 |
||||||||
Supplemental disclosures: |
||||||||||||
Interest paid |
$ 21.7 |
$ 36.7 |
$ 97.1 |
$ 140.0 |
||||||||
Income taxes paid |
$ 0.2 |
$ 1.5 |
$ 5.2 |
$ 5.0 |
||||||||
(a) Additions of long-lived assets |
$ (28.0) |
$ (26.5) |
$ (58.1) |
$ (64.1) |
Allison Transmission Holdings, Inc. |
||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures |
||||||||||||
(Unaudited, dollars in millions) |
||||||||||||
Three months ended |
Year ended |
|||||||||||
December 31, |
December 31, |
|||||||||||
2015 |
2014 |
2015 |
2014 |
|||||||||
Net income |
$ 13.0 |
$ 50.5 |
$ 182.3 |
$ 228.6 |
||||||||
plus: |
||||||||||||
Interest expense, net |
20.8 |
37.4 |
114.5 |
138.4 |
||||||||
Cash interest expense |
(21.7) |
(36.7) |
(97.1) |
(140.0) |
||||||||
Income tax expense |
6.7 |
27.3 |
106.5 |
139.5 |
||||||||
Cash income taxes |
(0.2) |
(1.5) |
(5.2) |
(5.0) |
||||||||
Amortization of intangible assets |
24.2 |
24.7 |
97.1 |
98.8 |
||||||||
Trade name impairment (a) |
80.0 |
- |
80.0 |
- |
||||||||
Environmental remediation (b) |
- |
- |
14.0 |
- |
||||||||
Loss associated with impairment of long-lived assets (c) |
- |
15.4 |
1.3 |
15.4 |
||||||||
Loss on impairment of technology-related investments (d) |
- |
- |
- |
2.0 |
||||||||
Public offering expenses (e) |
- |
- |
- |
1.4 |
||||||||
Adjusted net income |
$ 122.8 |
$ 117.1 |
$ 493.4 |
$ 479.1 |
||||||||
Cash interest expense |
21.7 |
36.7 |
97.1 |
140.0 |
||||||||
Cash income taxes |
0.2 |
1.5 |
5.2 |
5.0 |
||||||||
Depreciation of property, plant and equipment |
22.5 |
22.8 |
88.3 |
93.8 |
||||||||
Premiums and expenses on tender offer and redemption of long-term debt (f) |
- |
- |
25.3 |
- |
||||||||
Dual power inverter module extended coverage (g) |
- |
1.0 |
(2.1) |
1.0 |
||||||||
Unrealized (gain) loss on foreign exchange (h) |
(0.2) |
1.8 |
1.4 |
5.2 |
||||||||
Unrealized loss (gain) on commodity hedge contracts (i) |
0.4 |
0.7 |
1.1 |
(1.0) |
||||||||
Restructuring charge (j) |
- |
- |
- |
0.7 |
||||||||
Loss on repayments of long-term debt (k) |
0.1 |
0.2 |
0.3 |
0.5 |
||||||||
Other (l) |
2.6 |
3.5 |
9.8 |
14.7 |
||||||||
Adjusted EBITDA |
$ 170.1 |
$ 185.3 |
$ 719.8 |
$ 739.0 |
||||||||
Adjusted EBITDA excluding technology-related license expenses (m) |
$ 170.1 |
$ 188.1 |
$ 720.0 |
$ 745.1 |
||||||||
Net sales |
$ 478.2 |
$ 544.4 |
$ 1,985.8 |
$ 2,127.4 |
||||||||
Adjusted EBITDA margin |
35.6% |
34.0% |
36.2% |
34.7% |
||||||||
Adjusted EBITDA margin excluding technology-related license expenses (m) |
35.6% |
34.6% |
36.3% |
35.0% |
||||||||
Net Cash Provided by Operating Activities |
$ 173.8 |
$ 140.9 |
$ 563.8 |
$ 556.9 |
||||||||
(Deductions) or Additions to Reconcile to Adjusted Free Cash Flow: |
||||||||||||
Additions of long-lived assets |
(28.0) |
(26.5) |
(58.1) |
(64.1) |
||||||||
Excess tax benefit from stock-based compensation (n) |
0.2 |
11.8 |
8.4 |
24.6 |
||||||||
Technology-related license expenses (m) |
- |
2.8 |
0.2 |
6.1 |
||||||||
Adjusted Free Cash Flow |
$ 146.0 |
$ 129.0 |
$ 514.3 |
$ 523.5 |
(a) |
Represents a charge associated with the impairment of our trade name as a result of lower forecasted net sales for certain of our end markets. |
|||||||||||
(b) |
Represents environmental remediation expenses for ongoing operating, monitoring and maintenance activities at our Indianapolis, Indiana manufacturing facilities as a result of the U.S. Environmental Protection Agency determining that we are responsible for future operating, monitoring and maintenance activities and that General Motor's environmental remediation activities, pursuant the asset purchase agreement, were completed in the third quarter of 2015. |
|||||||||||
(c) |
Represents a charge associated with the impairment of long-lived assets related to the production of a new hybrid propulsion system. |
|||||||||||
(d) |
Represents a charge (recorded in Other income (expense), net) for investments in co-development agreements to expand our position in transmission technologies. |
|||||||||||
(e) |
Represents fees and expenses (recorded in Other income (expense), net) related to our secondary offerings in September 2014, June 2014, April 2014 and February 2014. |
|||||||||||
(f) |
Represents premiums and expenses related to the tender offer and redemption of Allison Transmission, Inc.'s ("ATI"), our wholly owned subsidiary, 7.125% Senior Notes due 2019. |
|||||||||||
(g) |
Represents adjustments (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. |
|||||||||||
(h) |
Represents (gains) losses (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. |
|||||||||||
(i) |
Represents unrealized losses (gains) (recorded in Other income (expense), net) on the mark-to-market of our commodity hedge contracts. |
|||||||||||
(j) |
Represents a charge (recorded in Selling, general and administrative, and Engineering - research and development) related to employee headcount reductions in the second quarter of 2014. |
|||||||||||
(k) |
Represents losses (recorded in Other income (expense), net) realized on the repayments of ATI's long-term debt. |
|||||||||||
(l) |
Represents employee stock compensation expense (recorded in Cost of sales, Selling, general and administrative expenses, and Engineering – research and development). |
|||||||||||
(m) |
Represents payments (recorded in Engineering – research and development) for licenses to expand our position in transmission technologies. |
|||||||||||
(n) |
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. |
Logo - http://photos.prnewswire.com/prnh/20120702/DE33547LOGO
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/allison-transmission-announces-fourth-quarter-and-full-year-2015-results-300216841.html
SOURCE
Investor Relations, ir@allisontransmission.com, (317) 242-3078, or Media Relations, media@allisontransmission.com, (317) 242-5000