Second Quarter 2015 Earnings Conference Call. August 05, 2015

Transcription

1 Secnd Quarter 2015 Earnings Cnference Call August 05, 2015

2 Nn-GAAP Financial Measures and Frward-Lking Statements Frward-Lking Statements This webcast and presentatin cntains statements that are frward-lking statements within the meaning f the Private Securities Litigatin Refrm Act f Frward lking statements include all statements that d nt relate slely t histrical r current facts and can generally be identified by the use f future dates r wrds such as "may," "shuld," "culd," will, "expects," "seeks t," "anticipates," "plans," "believes," "estimates," "intends," "predicts," "prjects," "ptential" r "cntinue" r the negative f such terms and ther cmparable terminlgy. These statements als include, but are nt limited t, the 2015 utlk and prjectins fr reprted net sales, value-added sales, EBITDA margin, capital expenditures and the change in wrking capital, and imprving cst and peratinal efficiencies, and are based n current expectatins, estimates and prjectins abut the cmpany's business based, in part, n assumptins made by management. These statements are nt guarantees f future perfrmance and invlve risks, uncertainties and assumptins that are difficult t predict. Therefre, actual utcmes and results may differ materially frm what is expressed r frecasted in such frward-lking statements due t numerus factrs, risks and uncertainties discussed frm time t time in the cmpany's Securities and Exchange Cmmissin filings and reprts, including the cmpany's mst recent Annual Reprt n Frm 10-K and subsequent filings. Yu are cautined nt t unduly rely n such frward lking statements when evaluating the infrmatin presented in this press release. Such frward-lking statements speak nly as f the date n which they are made and the cmpany des nt undertake any bligatin t update any frward-lking statement t reflect events r circumstances after the date f this webcast r presentatin. Use f Nn-GAAP Financial Measures In additin t the results reprted in accrdance with GAAP included thrughut this earnings release, this release refers t Adjusted EBITDA, which we have defined as earnings befre interest, taxes, depreciatin, amrtizatin, restructuring charges and impairments f lng-lived assets and Value-Added Sales which we define as net sales less upcharges primarily fr the aluminum value in net sales. Adjusted EBITDA as a percentage f Valued Added Sales is a key measure that is nt calculated accrding t GAAP. Adjusted EBITDA as a percentage f Value Added Sales is defined as Adjusted EBITDA divided by Valued Added Sales. Management believes the nn-gaap financial measures used in this presentatin are useful t bth management and investrs in their analysis f the Cmpany s financial psitin and results f peratins. Further, management uses these nn-gaap financial measures fr planning and frecasting future perids. This nn-gaap financial infrmatin is prvided as additinal infrmatin fr investrs and is nt in accrdance with r an alternative t GAAP. These nn-gaap measures may be different frm similar measures used by ther cmpanies. Fr recnciliatins f adjusted EBITDA and Value-Added Sales t the mst directly cmparable financial measures calculated and presented in accrdance with GAAP, see the supplemental data pages attached t the Cmpany s press release n Secnd Quarter 2015 Financial Results which, tgether with the press release, have been psted n the Cmpany s website thrugh the Investrs link at [ We have nt quantitatively recnciled differences between Valued-Added sales, EBITDA and EBITDA margins and their crrespnding GAAP measures, in ur 2015 Outlk, due t the inherent uncertainty regarding variables affecting the cmparisn f these frward-lking measures. The magnitude f these differences, hwever, may be significant.

3 Secnd Quarter Highlights Significant imprvement in perfrmance, despite sales decline Financial Highlights Net sales f $183.9M; Value-added sales f $88.2M 7.6% decline in net sales, 11.5% decline in valueadded sales 269K, r 9.0% decline in unit shipments Adjusted EBITDA f $20.3M, 23.0% f Value-Added Sales, an increase f 730bps 29.5% increase in adjusted EBITDA y--y Lwer csts related t previus plant clsure and reallcatin f prductin vlume, lwer energy csts, and increased cst perfrmance acrss all manufacturing facilities Net incme f $6.5M r $0.24 per diluted share, an increase f 33.3% cmpared t $0.18 per diluted share in 2Q14 Operating cash flw increased t $26.2M in 2Q15 Fcused n strengthening cmpetitiveness and driving prfitability Ramp-up at new facility in Mexic n plan Successful ramp-up f new Mexican finishing facility, a jint venture with supplier partner Relcatin f crprate headquarters in Suthfield, Michigan n track t be cmpleted in 2015 Achieved recrd quality perfrmance fr June Pursuing new initiatives t drive prductivity gains New favrable tax strategy, perfrmance management prcess, ERP system, shared service center, and prgram management prcess Adding incremental shifts at manufacturing facilities, increasing capacity and reducing bttlenecks Cntinued cmmitment t returning cash t sharehlders Business Highlights Paid quarterly dividend f $0.18 per share Unit shipments expected t increase in 2H15 Repurchased 286K shares fr $5.5M in 2Q15 Unit shipments increased 175K vs. 1Q15 557,643 shares repurchased fr a ttal f $10.4M thrugh August 3, 2015 as part f the $30M share repurchase prgram apprved in Octber

4 Strategic Pririties Imprving glbal cmpetitiveness Building n culture f prduct innvatin and technlgy Evaluating pprtunities fr disciplined grwth and value creatin Balanced apprach t capital allcatin Increasing visibility with financial cmmunity 4

5 Superir Shipments 2Q15 unit shipments declined by 9% year-ver-year; imprved by 7% vs. 1Q15 Cmparisn NA Light Vehicle Prductin Superir Shipments 2Q Q % Change (y--y) 2.8% (9.0%) 1Q % Change (sequential) 6.1% 6.9% SUP shipments ttaled 2.71M, dwn 9% frm priryear perid Declines in: Chrysler Twn and Cuntry: dwn (113K) units, r (81%) y--y Frd Edge: dwn (66K) units, r (63%) y--y Nissan Maxima: dwn (47K) units, r (97%) y--y K2XX: dwn (41K) units r (9%) y--y Partially mitigated by increases in: Frd Fcus up 84K units; Mazda 2 up 45K units bth new prgrams in 2015 Tyta Highlander: up 35K units, r 31% y--y Frd Fusin: up 27K units, r 28% y--y Lwer unit shipments had $16.5M negative impact n net sales Sequential quarterly shipments increased 7%, utpacing grwth in verall vehicle prductin Frd shipments increased 20% versus 1Q15 driven primarily by imprvements in the F Series, Superir s largest prgram Unit shipment vlumes are expected t imprve in 2H15 due t the ramp up in vehicle prductin f recently launched custmer prgrams and new custmer prgrams cming n-line 5

6 Financial Highlights Sales Lwer unit vlumes drve majrity f net sales decline in 2Q15 and YTD, partially ffset by higher aluminum prices Millins Variance Millins Variance 2Q15 2Q14 Amunt Percent FY 2015 FY 2014 Amunt Percent Vlume (Wheels Shipped) (0.27) -9% (0.56) -10% Net Sales: Ttal $183.9 $199.0 ($15.1) -8% $357.7 $382.4 ($24.7) -6% Vlume ($16.5) ($34.0) Prject Develpment ($0.5) ($0.6) Sales Adjustments $0.1 ($0.8) Pass-Thrugh Upcharges ($1.3) ($4.9) Price / Mix $3.1 $15.6 Aluminum Cntent - Price $5.6 $5.6 $19.6 Aluminum Cntent - Weight $3.1 $0.0 $15.6 $0.2 FX Impact ($1.5) ($2.7) Price / Mix Other ($1.0) ($1.6) $19.8 6

7 Secnd Quarter EBITDA Cmparisn Year-Over-Year 2Q15 Adjusted EBITDA increased 29% -- Reached 23% f Value-Added Sales (+ 730bps) Vlume / Mix Units shipped declined by 269K y--y, with slightly negative mix FX Impact Change reflects Pes devaluatin against US$ net f hedges Metal Unfavrable timing f aluminum pass thrugh related t price adjustments with custmers vs. suppliers Cst Perfrmance Largely driven by lwer perating csts related t the previus plant clsure and reallcatin f prductin t ther manufacturing facilities, as well as imprved cst perfrmance acrss all ther manufacturing facilities SG&A Higher legal and cnsulting expense, primarily related t the prxy cntest, emplyee terminatin csts, and the cmbined effect f 2014 favrable impact frm cllecting aged accunts receivable previusly reserved fr and 2015 expense fr the write-dwn f aged accunts receivable Rgers Restructuring Cst $1.2M f clsure related expense, excluding depreciatin 7

8 June YTD EBITDA Cmparisn Year-Over-Year June YTD Adjusted EBITDA increased 11% -- Reached 20% f Value-Added Sales (+ 410bps) Vlume / Mix Units shipped declined 562K with slightly negative mix FX Impact Change reflects Pes devaluatin against US$ net f hedges Metal Unfavrable timing f aluminum pass thrugh related t price adjustments with custmers vs. suppliers Cst Perfrmance Largely driven by lwer perating csts related t the previus plant clsure and reallcatin f prductin t ther manufacturing facilities, as well as imprved cst perfrmance acrss all ther manufacturing facilities Prject Develpment Primarily driven by timing f develpment revenues SG&A Higher legal and cnsulting expense, primarily related t the prxy cntest, higher emplyee terminatin csts, and the cmbined effect f a 2014 favrable impact frm cllecting aged accunts receivable previusly reserved fr and 2015 expense fr the write-dwn f aged accunts receivable Rgers Restructuring Cst $2.5M f clsure related expense, excluding depreciatin 8

9 Financial Highlights Cash Flw 1H15 perating cash flw $25.2M vs. $1.5M in 1H14 - driven by 2Q15 imprvement 2Q15 perating cash flw f $26.2M, mre than duble $12.2M in 2Q14 Majrity f change driven by accunts receivable 1H15 capital expenditures $23.3M vs. $55.5M in 1H14 2Q15 capital expenditures f $8.4M cmpared t $30.1M in a $21.7M (72%) decline 2Q15 2Q14 Existing facilities $ 7.6M $ 7.5M New facility $.8M $ 22.6M Ttal $ 8.4M $ 30.1M Dividends $9.6M thrugh June 2015 YTD and $4.8M in 2Q15 As part f the $30M share repurchase prgram apprved in Octber H15 share repurchases - 395K shares / $7.5M 2Q15 share repurchases - 286K shares / $5.5M Prgram t date thrugh August 3 rd, 2015 share repurchases - 558K shares / $10.4M all in

10 2015 Outlk Unchanged Key Metrics Net Sales / EBITDA Margin Value-Added Sales 1 / EBITDA Margin Capital Expenditures Wrking Capital Dividend Payments 2015 Outlk $725 millin - $800 millin / basis pint imprvement in EBITDA margin $325 millin - $360 millin / basis pint imprvement in valueadded EBITDA margin Apprximately $40 millin Use f apprximately $10 millin Apprximately $20 millin Underlying Assumptins Nrth American Light Vehicle Prductin will increase 2.2% t 17.4 millin units Gal is duble digit EBITDA margins (1) Value-Added Sales excludes Aluminum Csts (2) Based n IHS Prjectins 10

11 Unaudited Cmparative Incme Statement 2Q15 (US$ in Thusands, except fr units and per share amunts) 2Q15 2Q14 Variance Actual Actual Actual Unit Shipments 2,713,483 2,982,772 (269,289) Ttal Revenues $ 183,940 $ 198,966 $ (15,026) Value Added Revenue (1) $ 88,219 $ 99,729 $ (11,510) Grss Prfit $ 19,920 $ 15,732 $ 4,188 % f Revenues 10.8% 7.9% 2.9% % f Value Added Revenue 22.6% 15.8% 6.8% SG&A Expenses $ (8,881) $ (7,288) $ (1,593) % f Revenues -4.8% -3.7% -1.2% Operating Incme $ 11,039 $ 8,444 $ 2,595 Interest Incme, net $ 57 $ 311 $ (254) Freign Exchange Gain (Lss) $ (281) $ (174) $ (106) Other Incme (Expense), net $ (81) $ 81 $ (162) Incme Befre Incme Taxes $ 10,734 $ 8,662 $ 2,072 Incme Tax (Prvisin) Benefit $ (4,200) $ (3,623) $ (577) Net Incme $ 6,534 $ 5,039 $ 1,495 Incme Per Share - Diluted $ 0.24 $ 0.18 $ 0.06 EBITDA $ 19,172 $ 15,685 $ 3,487 EBITDA % f Revenue 10.4% 7.9% 2.5% EBITDA % f Value Added Revenue 21.7% 15.7% 6.0% EBITDA Adjusted (2) $ 20,307 $ 15,685 $ 4,621 EBITDA % Revenue Adjusted (2) 11.0% 7.9% 3.2% EBITDA % Value Added Revenue Adjusted (2) 23.0% 15.7% 7.3% 11

12 Unaudited Cmparative Incme Statement 2H15 (US$ in Thusands, except fr units and per share amunts) June 2015 YTD June 2014 YTD Variance Actual Actual Actual Unit Shipments 5,251,828 5,813,720 (561,892) Ttal Revenues $ 357,669 $ 382,356 $ (24,687) Value Added Revenue (1) $ 169,896 $ 193,601 $ (23,704) Grss Prfit $ 31,142 $ 31,368 $ (226) % f Revenues 8.7% 8.2% 0.5% % f Value Added Revenue 18.3% 16.2% 2.1% SG&A Expenses $ (16,433) $ (15,221) $ (1,212) % f Revenues -4.6% -4.0% -0.6% Operating Incme $ 14,709 $ 16,147 $ (1,438) Interest Incme, net $ 142 $ 660 $ (517) Freign Exchange Gain (Lss) $ (514) $ (180) $ (333) Other Incme (Expense), net $ (30) $ 95 $ (125) Incme Befre Incme Taxes $ 14,307 $ 16,721 $ (2,413) Incme Tax (Prvisin) Benefit $ (3,439) $ (6,860) $ 3,421 Net Incme $ 10,868 $ 9,861 $ 1,007 Incme Per Share - Diluted $ 0.40 $ 0.36 $ 0.04 EBITDA $ 31,187 $ 30,457 $ 731 EBITDA % f Revenue 8.7% 8.0% 0.8% EBITDA % f Value Added Revenue 18.4% 15.7% 2.6% EBITDA Adjusted (2) $ 33,677 $ 30,457 $ 3,220 EBITDA % Revenue Adjusted (2) 9.4% 8.0% 1.5% EBITDA % Value Added Revenue Adjusted (2) 19.8% 15.7% 4.1% 12

13 Unaudited Summary Balance Sheets (US$ in Millins) June 2015 December Increase ASSETS Actual 2014 (Decrease) Cash & Cash Equivalents $ 57.3 $ 62.5 $ (5.2) Shrt Term Investments $ (2.6) Accunts Receivable, net (0.1) Inventries, net (5.3) Prepaid Aluminum Other Current Assets (0.7) Ttal Current Assets (9.9) Prperty, Plant & Equipment (7.4) Investments Deferred Taxes (2.7) Other Assets Ttal Assets $ $ $ (18.5) LIABILITIES & EQUITY Accunts Payable $ 22.9 $ 23.9 $ (1.0) Other Current Liabilities (4.3) Ttal Current Liabilities (5.3) Nn-Current Liabilities (6.5) Sharehlders' Equity (6.7) Ttal Liabilities & Equity $ $ $ (18.5) 13

14 Unaudited Cmparative Cash Flw Statement 2H15 (US$ in Millins) Jun-15 YTD Jun-14 YTD Increase Actual Actual (Decrease) Net Incme (Lss) $ 10.9 $ 9.9 $ 1.0 Depreciatin Deferred Incme Taxes & FIN 48 (3.7) 0.4 (4.1) Accunts Receivable (1.0) (23.3) 22.3 Inventries 5.2 (0.9) 6.1 Prepaid Aluminum (4.0) (4.6) 0.6 Accunts Payable and Accrued Liabilities (1.0) Other Operatins Related Items (2.5) 1.3 (3.8) Cash Flw frm Operatins Cash Dividends (9.6) (9.8) 0.2 Capital Expenditures (23.3) (55.5) 32.2 Prceeds frm Exercise f Stck Optins Stck Repurchase (7.5) (13.0) Net Change in Maturing Investments Prceeds frm Sales f Fixed Assets All Other (0.8) 0.6 (1.4) Net Increase (Decrease) (5.1) (72.6) Cash - Beginning (136.9) - Cash - Ending $ 57.3 $ $ (69.4) 14