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American Axle & Manufacturing Holdings I Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: October 28, 2011 12:55PM

American Axle & Manufacturing Holdings I (AXL) filed Quarterly Report for the period ended 2011-09-30. American Axle & Manufacturing Holdings Inc. has a market cap of $756.3 million; its shares were traded at around $10.04 with a P/E ratio of 4.6 and P/S ratio of 0.3.



Highlight of Business Operations:

Gross Profit Gross profit increased to $349.4 million in the first nine months of 2011 as compared to $300.1 million in the first nine months of 2010. Gross margin was 17.7% in the first nine months of 2011 and 2010. The increase in gross profit in the first nine months of 2011 as compared to the first nine months of 2010 primarily reflects the positive impact of an increase in sales and productivity gains, partially offset by the impact of the implementation of certain provisions of the 2009 Settlement and Commercial Agreement with GM. These provisions were effective January 1, 2011 and, among other things, include expanded warranty cost sharing and product price-downs. Gross profit in the first nine months of 2011 also includes special charges and other non-recurring operating costs of $10.3 million, which includes asset impairment charges and indirect inventory obsolescence as a result of the announced closure of CKMF and other plant closure related costs. Gross profit in the first nine months of 2011 also includes a $6.1 million gain related to the sale of equipment that we had previously written down to its estimated fair value as a result of asset impairments.

Income Tax Expense Income tax expense was $4.2 million in the first nine months of 2011 as compared to $5.2 million in the first nine months of 2010. Our effective income tax rate was 3.8% in the first nine months of 2011 as compared to 6.1% in the first nine months of 2010. Our income tax expense and effective tax rate in the first nine months ended September 30, 2011 reflects the effect of recognizing a net operating loss benefit against our taxable income in the U.S. Our income tax expense for the nine months ended September 30, 2011 also reflects net tax benefits of $2.8 million relating to the favorable resolution of income tax audits and the reversal of state deferred tax liabilities due to newly enacted Michigan tax legislation. Our income tax expense and effective tax rate in the first nine months of 2010 reflects the effect of recording a valuation allowance against income tax benefits on U.S. losses.

Financing Activities In the first nine months of 2011, net cash provided by financing activities was $39.4 million as compared to net cash used in financing activities of $64.3 million in the first nine months of 2010. Total long-term debt outstanding increased $40.6 million in the first nine months of 2011 to $1,050.6 million as compared to $1,010.0 million at year-end 2010, primarily as a result of borrowing on our Amended Revolving Credit Facility in the third quarter of 2011, which was partially offset by using cash flow from operations to redeem 10% of our 9.25% Notes outstanding during the second quarter of 2011.

Selling, General and Administrative Expenses (SG&A) SG&A (including research and development (R&D)) was $174.5 million or 8.8% of net sales in the first nine months of 2011 as compared to $147.0 million or 8.6% of net sales in the first nine months of 2010. R&D increased by $26.5 million to $85.4 million in the first nine months of 2011 as compared to $58.9 million in the first nine months of 2010. The increase in SG&A in the first nine months of 2011 primarily reflects increased R&D spending, including costs related to e-AAM, a joint venture we formed in the fourth quarter of 2010 to develop and commercialize electric AWD hybrid driveline systems for passenger cars and crossover vehicles.

Selling, General and Administrative Expenses (SG&A) SG&A (including research and development (R&D)) was $59.0 million or 9.1% of net sales in the third quarter of 2011 as compared to $53.2 million or 8.6% of net sales in the third quarter of 2010. R&D increased by $10.6 million to $31.8 million in the third quarter of 2011 as compared to $21.2 million in the third quarter of 2010. The increase in SG&A in the third quarter of 2011 primarily reflects increased R&D spending, including costs related to e-AAM Driveline Systems AB (e-AAM), a joint venture we formed in the fourth quarter of 2010 to develop and commercialize electric AWD hybrid driveline systems for passenger cars and crossover vehicles, which is partially offset by lower profit sharing accruals and other incentive compensation expense.

Read the The complete Report



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