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TheStreet Open House

Accuride Corporation Turnaround Continues In Second Quarter

Stocks in this article: ACW

Earnings Conference Call InformationAccuride will hold a conference call to discuss its Second Quarter 2012 financial and operational results on Friday, July 27, 2012, beginning at 9:00 a.m. Central Time. Analysts and investors may participate on the live conference call by dialing (800) 299-0148 in the United States, or (617) 801-9711 internationally, and using participant code 75071653. A live webcast of the conference call can be accessed at the Accuride Website’s Investor Information section: www.accuridecorp.com. A replay of the call will be available from July 27, 2012, at 11:00 a.m. Central Time until August 3, 2012, at 11:59 p.m. Central Time by calling (888) 286-8010 in the United States, or (617) 801-6888 internationally, using access code 76999878.

About Accuride CorporationWith headquarters in Evansville, Indiana, Accuride Corporation is a leading supplier of components to the commercial vehicle industry. The Company’s products include commercial vehicle wheels, wheel-end components and assemblies, truck body and chassis parts, and other commercial vehicle components. The Company’s products are marketed under its brand names, which include Accuride ®, Gunite ®, Imperial TM and Brillion TM. Accuride’s common stock trades on the New York Stock Exchange under the ticker symbol ACW. For more information, visit the Company’s website at http://www.accuridecorp.com.

Forward-Looking Statements Statements contained in this news release that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding Accuride’s expectations, hopes, beliefs, and intentions with respect to future results. Such statements are subject to the impact on Accuride’s business and prospects generally of, among other factors, market demand in the commercial vehicle industry, general economic, business and financing conditions, labor relations, governmental action, competitor pricing activity, expense volatility and other risks detailed from time to time in Accuride’s Securities and Exchange Commission filings, including those described in Item 1A of Accuride’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011. Any forward-looking statement reflects only Accuride’s belief at the time the statement is made. Although Accuride believes that the expectations reflected in these forward-looking statements are reasonable, it cannot guarantee its future results, levels of activity, performance or achievements. Except as required by law, Accuride undertakes no obligation to update any forward-looking statements to reflect events or developments after the date of this news release.

 
 

Three Months Operating Results

       
Three Months Ended June 30,
(Dollars in thousands)         2012       2011
       
Net sales:
Wheels $ 112,881 42.0 % $ 102,927 42.6 %
Gunite 67,280 25.0 % 67,093 27.7 %
Brillion Iron Works 49,326 18.4 % 38,194 15.8 %
Imperial Group   39,296 14.6 %   33,658 13.9 %
Total net sales $ 268,783 100 % $ 241,872 100 %
 
Gross Profit $ 24,825 9.2 % $ 22,444 9.3 %
 
Income (loss) from Operations:
Wheels $ 16,106 14.3 % $ 12,136 11.8 %
Gunite (1,875 ) (2.8 )% 3,793 5.7 %
Brillion Iron Works 7,598 15.4 % 689 1.8 %
Imperial Group (302 ) (0.8 )% 1,762 5.2 %
Corporate / Other   (11,935 ) %   (9,920 ) %
Consolidated Total $ 9,592 3.6 % $ 8,460 3.5 %
 
Net income (loss) $ (841 ) (0.3 )% $ 1,277 0.5 %
 
Adjusted EBITDA
Wheels $ 25,796 22.9 % $ 21,524 20.9 %
Gunite 1,058 1.6 % 5,743 8.6 %
Brillion Iron Works 8,802 17.8 % 1,901 5.0 %
Imperial Group (44 ) (0.1 )% 2,072 6.2 %
Corporate / Other   (10,304 ) %   (9,992 ) %
Continuing Operations $ 25,308 9.4 % $ 21,248 8.8 %
 
Bostrom Seating % %
Fabco Automotive   %   1,321 %
Consolidated Total $ 25,308 9.4 % $ 22,569 9.1 %
 
 

Six Months Operating Results

 
        Six Months Ended June 30,
(Dollars in thousands)         2012       2011
       
Net sales:
Wheels $ 229,825 42.7 % $ 194,436 43.0 %
Gunite 135,843 25.2 % 126,324 27.9 %
Brillion Iron Works 93,136 17.3 % 73,454 16.2 %
Imperial Group   79,497 14.8 %   58,553 12.9 %
Total net sales $ 538,301 100 % $ 452,767 100 %
 
Gross Profit $ 46,925 8.7 % $ 39,734 8.8 %
 
Income (loss) from Operations:
Wheels $ 34,548 15.0 % $ 23,624 12.2 %
Gunite (4,043 ) (3.0 )% 2,076 1.6 %
Brillion Iron Works 10,771 11.6 % 1,422 1.9 %
Imperial Group (821 ) (1.0 )% 2,891 4.9 %
Corporate / Other   (23,627 ) %   (20,112 ) %
Consolidated Total $ 16,828 3.1 % $ 9,901 2.2 %
 
Net loss $ (3,790 ) (0.7 )% $ (3,884 ) (0.9 )%
 
Adjusted EBITDA
Wheels $ 54,136 23.6 % $ 43,711 22.5 %
Gunite 1,574 1.2 % 6,746 5.3 %
Brillion Iron Works 13,242 14.2 % 4,646 6.3 %
Imperial Group (311 ) (0.4 )% 2,945 5.0 %
Corporate / Other   (21,690 ) %   (20,719 ) %
Continuing Operations $ 46,951 8.7 % $ 37,329 8.2 %
 
Bostrom Seating % (22 ) %
Fabco Automotive   %   2,239 %
Consolidated Total $ 46,951 8.7 % $ 39,546 8.5 %
 
 
 

ACCURIDE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

 
       

Three Months Ended June 30,

   

Six Months Ended June 30,

(in thousands except per share data) 2012   2011 2012   2011
 
NET SALES $ 268,783 $ 241,872 $ 538,301 $ 452,767
COST OF GOODS SOLD 243,958 219,428 491,376 413,033
GROSS PROFIT 24,825 22,444 46,925 39,734
OPERATING EXPENSES:
Selling, general and administrative 15,233 13,984 30,097 29,833
INCOME FROM OPERATIONS 9,592 8,460 16,828 9,901
OTHER INCOME (EXPENSE):
Interest expense, net (8,658 ) (8,400 ) (17,403 ) (16,740 )
Other income (loss), net (436 ) 233 (279 ) 2,396
INCOME (LOSS) BEFORE INCOME TAXES FROM CONTINUING OPERATIONS 498 293 (854 ) (4,443 )
INCOME TAX PROVISION (BENEFIT) 1,339 (107 ) 2,936 392
INCOME (LOSS) FROM CONTINUING OPERATIONS (841 ) 400 (3,790 ) (4,835 )
DISCONTINUED OPERATIONS, NET OF TAX 877 951
NET INCOME (LOSS) $ (841 ) $ 1,277 $ (3,790 ) $ (3,884 )
Weighted average common shares outstanding—basic 47,376 47,277 47,347 47,259
Basic income (loss) per share – continuing operations $ (0.02 ) $ 0.01 $ (0.08 ) $ (0.10 )
Basic income (loss) per share – discontinued operations 0.02 0.02
Basic income (loss) per share $ (0.02 ) $ 0.03 $ (0.08 ) $ (0.08 )
Weighted average common shares outstanding—diluted 47,376 47,442 47,347 47,259
Diluted income (loss) per share – continuing operations $ (0.02 ) $ 0.01 $ (0.08 ) $ (0.10 )
Diluted income (loss) per share – discontinued operations 0.02 0.02
Diluted income (loss) per share $ (0.02 ) $ 0.03 $ (0.08 ) $ (0.08 )
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Foreign currency translation adjustments 179 (28 ) (39 ) (147 )
COMPREHENSIVE INCOME (LOSS) $ (662 ) $ 1,249 $ (3,829 ) $ (4,031 )
 
 
 

ACCURIDE CORPORATION

CONSOLIDATED ADJUSTED EBITDA

(UNAUDITED)

 
        Three Months Ended June 30,
(In thousands)         2012     2011
 
Net income (loss) $ (841 )   $ 1,277
Income tax expense (benefit) 1,339 (109 )
Interest expense, net 8,658 8,400
Depreciation and amortization 12,782 11,770
Restructuring, severance and other charges 1 1,967 764
Other items related to our credit agreement 2 1,403 467
Adjusted EBITDA $ 25,308 $ 22,569
 

Note:

1)

   

For the three months ended June 30, 2012, Adjusted EBITDA represents net income before net interest expense, income tax expense, depreciation and amortization, plus $2.0 million in costs associated with restructuring items. For the three months ended June 30, 2011, Adjusted EBITDA represents net income before net interest expense, income tax benefit, depreciation and amortization, plus $0.8 million in costs associated with restructuring items.

2)

Items related to our credit agreement refer to amounts utilized in the calculation of financial covenants in Accuride’s senior credit facility. For the three months ended June 30, 2012, items related to our credit agreement consisted of foreign currency losses and other income or expenses of $1.4 million. For the three months ended June 30, 2011, items related to our credit agreement consisted of foreign currency income and other income or expenses of $0.5 million.

 
       
Six Months Ended June 30,
(In thousands)         2012     2011
 
Net loss $ (3,790 )   $ (3,884 )
Income tax expense 2,936 391
Interest expense, net 17,403 16,740
Depreciation and amortization 25,312 25,953
Restructuring, severance and other charges 1 3,096 1,301
Other items related to our credit agreement 2 1,994 (955 )
Adjusted EBITDA $ 46,951 $ 39,546
 

Note:

1)

   

For the six months ended June 30, 2012, Adjusted EBITDA represents net income before net interest expense, income tax expense, depreciation and amortization, plus $3.1 million in costs associated with restructuring items. For the six months ended June 30, 2011, Adjusted EBITDA represents net income before net interest expense, income tax expense, depreciation and amortization, plus $1.3 million in costs associated with restructuring items.

2)

Items related to our credit agreement refer to amounts utilized in the calculation of financial covenants in Accuride’s senior credit facility. For the six months ended June 30, 2012, items related to our credit agreement consisted of foreign currency income and other income or expenses of $2.0 million. For the six months ended June 30, 2011, items related to our credit agreement consisted of foreign currency income and other income or expenses of $1.0 million.

 
 
 

ACCURIDE CORPORATION

SEGMENT ADJUSTED EBITDA RECONCILIATION

(UNAUDITED)

 
        Three Months Ended June 30, 2012
(In thousands)        

Income (loss) from Operations

   

Depreciation and Amortization

    Other    

Adjusted EBITDA

Wheels $ 16,106   $ 8,090     $ 1,600   $ 25,796
Gunite (1,875 ) 2,683 250 1,058
Brillion Iron Works 7,598 1,174 30 8,802
Imperial Group (302 ) 233 25 (44 )
Corporate / Other   (11,935 )   602   1,029   (10,304 )
Continuing Operations $ 9,592 $ 12,782 $ 2,934 $ 25,308
 
Bostrom
Fabco Automotive        
Consolidated Total $ 9,592 $ 12,782 $ 2,934 $ 25,308
 
Three Months Ended June 30, 2011
(In thousands)        

Income (loss) from Operations

   

Depreciation and Amortization

    Other    

Adjusted EBITDA

Wheels $ 12,136 $ 7,582 $ 1,806 $ 21,524
Gunite 3,793 1,901 49 5,743
Brillion Iron Works 689 1,185 27 1,901
Imperial Group 1,762 281 29 2,072
Corporate / Other   (9,920 )   377   (449 )   (9,992 )
Continuing Operations $ 8,460 $ 11,326 $ 1,462 $ 21,248
 
Bostrom
Fabco Automotive   877   444     1,321
Consolidated Total $ 9,337 $ 11,770 $ 1,462 $ 22,569
 
Six Months Ended June 30, 2012
(In thousands)        

Income (loss) from Operations

   

Depreciation and Amortization

    Other    

Adjusted EBITDA

Wheels $ 34,548 $ 16,110 $ 3,478 $ 54,136
Gunite (4,043 ) 5,117 500 1,574
Brillion Iron Works 10,771 2,411 60 13,242
Imperial Group (821 ) 460 50 (311 )
Corporate / Other   (23,627 )   1,214   723   (21,690 )
Continuing Operations $ 16,828 $ 25,312 $ 4,811 $ 46,951
 
Bostrom
Fabco Automotive        
Consolidated Total $ 16,828 $ 25,312 $ 4,811 $ 46,951
 
Six Months Ended June 30, 2011
(In thousands)        

Income (loss) from Operations

   

Depreciation and Amortization

    Other    

Adjusted EBITDA

Wheels $ 23,624 $ 16,681 $ 3,406 $ 43,711
Gunite 2,076 4,337 333 6,746
Brillion Iron Works 1,422 3,167 57 4,646
Imperial Group 2,891 4 50 2,945
Corporate / Other   (20,112 )   658   (1,265 )   (20,719 )
Continuing Operations $ 9,901 $ 24,847 $ 2,581 $ 37,329
 
Bostrom (112 ) 90 (22 )
Fabco Automotive   1,223   1,016     2,239
Consolidated Total $ 11,012 $ 25,953 $ 2,581 $ 39,546
 

We define Adjusted EBITDA as our net income or loss before income tax expense or benefit, interest expense, net, depreciation and amortization, restructuring, severance, and other charges, impairment, and currency losses, net. Adjusted EBITDA has been included because we believe that it is useful for us and our investors to measure our ability to provide cash flows to meet debt service. Adjusted EBITDA should not be considered an alternative to net income (loss) or other traditional indicators of operating performance and cash flows determined in accordance with accounting principles generally accepted in the United States (“GAAP”). We present the table of Adjusted EBITDA because covenants in the agreements governing our material indebtedness contain ratios based on this measure on a quarterly basis. While Adjusted EBITDA is used as a measure of liquidity and the ability to meet debt service requirements, it is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculations.

 
 

ACCURIDE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

           
June 30, December 31,
(In thousands)         2012     2011
 
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 35,661 $ 56,915
Customer and other receivables 114,678 98,075
Inventories, net 82,299 72,827
Other current assets 13,390 12,332
Total current assets 246,028 240,149
PROPERTY, PLANT AND EQUIPMENT, net 288,776 271,562
OTHER ASSETS:
Goodwill and other assets 349,488 357,151
TOTAL $ 884,292 $ 868,862
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable $ 83,584 $ 80,261
Other current liabilities 50,669 48,228
Total current liabilities 134,253 128,489
LONG-TERM DEBT 323,607 323,082
OTHER LIABILITIES 171,373 159,908
STOCKHOLDERS’ EQUITY:
Total stockholders’ equity 255,059 257,383
TOTAL $ 884,292 $ 868,862
 




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