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American Axle & Manufacturing Holdings I Reports Operating Results (10-K)
Posted by: gurufocus (IP Logged)
Date: February 8, 2013 11:36PM
American Axle & Manufacturing Holdings I (AXL) filed Annual Report for the period ended 2012-12-31.
Highlight of Business Operations:We are also the principal supplier of driveline system products for the Chrysler Group LLC's (Chrysler) heavy-duty Ram full-size pickup trucks (Ram program) and its derivatives. Sales to Chrysler were approximately 10% of our total net sales in 2012, 8% in 2011 and 9% in 2010. In addition to GM and Chrysler, we supply driveline systems and other related components to Volkswagen AG (Volkswagen), Mack Trucks Inc. (Mack Truck), PACCAR Inc., Harley-Davidson Inc., Tata Motors, Nissan Motor Co., Ltd. (Nissan), Ford Motor Company (Ford), Deere & Company, Scania AB, Audi AG (Audi) and other original equipment manufacturers (OEMs) and Tier I supplier companies such as Jatco Ltd. and Hino Motors Ltd. Our net sales to customers other than GM increased to $792.6 million in 2012 as compared to $710.0 million in 2011 and $563.0 million in 2010.
NET SALES Net sales increased by 13% to $2,930.9 million in 2012 as compared to $2,585.0 million in 2011 and $2,283.0 million in 2010.
GROSS PROFIT Gross profit was $399.7 million in 2012 as compared to $455.1 million in 2011 and $401.7 million in 2010. Gross margin was 13.6% in 2012 as compared to 17.6% in both 2011 and 2010. The change in gross profit in 2012 as compared to 2011 primarily reflects the impact of special charges related to the closure of DMC and CKMF, as well as costs associated with increased levels of global launch activity, which includes premium freight costs, lower capacity utilization and labor inefficiencies. We estimate premium freight costs to be approximately $24 million in 2012. In addition, gross profit was adversely impacted by material cost inflation of approximately $32 million and higher warranty accruals.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (SG&A) SG&A (including R&D) was $243.3 million in 2012 as compared to $231.7 million in 2011 and $197.6 million in 2010. SG&A as a percentage of net sales was 8.3% in 2012, 9.0% in 2011 and 8.7% in 2010. The increase in SG&A in 2012 as compared to 2011 is primarily the result of higher R&D spending and increases in our salaried workforce to support worldwide growth, which is partially offset by lower incentive compensation accruals and stock-based compensation expense. The increase in SG&A in 2011 as compared to 2010 primarily reflects increased R&D spending, including costs related to e-AAM, a joint venture that we formed with Saab Automobile AB (Saab) in the fourth quarter of 2010 that is now a wholly-owned subsidiary.
NET INCOME ATTRIBUTABLE TO AAM AND EARNINGS PER SHARE (EPS) Net income attributable to AAM was $367.7 million in 2012 as compared to $142.8 million in 2011 and $115.4 million in 2010. Diluted earnings per share was $4.87 in 2012 as compared to $1.89 per share in 2011 and $1.55 per share in 2010. Net Income and EPS were primarily impacted by the factors discussed in Gross Profit, SG&A, Interest Expense, Debt Refinancing and Redemption Costs and Income Tax Expense (Benefit).
Stocks Discussed: AXL,