Accuride Corporation (NYSE: ACW) – a leading supplier of components to the North American commercial vehicle industry – indicated that softening industry conditions and key customer developments are creating a challenging near-term environment. Class 8 truck orders continue to be weak and have led to rapidly declining build schedules at Accuride’s major OEM customers. In addition, Navistar and Paccar notified the Company that they will no longer offer Gunite hub and drum assemblies as standard equipment on their vehicles beginning in the third and fourth quarters of 2012, respectively. Fleets will continue to have the option to specify Gunite products when ordering vehicles.
The Company is taking the necessary actions to respond to these changing business conditions. The closure of the Elkhart facility and the consolidation of the Brillion machining operations into Gunite’s Rockford facility have been pulled ahead to the fourth quarter of 2012. The Company has also reduced its corporate salaried workforce by 14 percent, along with other cost reduction efforts.
Due to the uncertainty in the business environment, the Company’s expected 2012 performance will be below its previously announced guidance for 2012. As of September 30, 2012, the Company had $20.3 million of cash with $20.0 million outstanding on the $100.0 million commitment of the ABL revolver. Strong cash generated from operations during the third quarter was offset by the $14.7 million semi-annual interest payment on our senior secured notes and capital expenditures.
“In spite of the near-term industry challenges, our plan to ‘Fix & Grow’ Accuride is on track,” said Accuride President and CEO Rick Dauch. “We are taking the actions necessary to reduce our cost structure in the face of challenging and rapidly changing industry conditions, without jeopardizing our operational turnaround and long-term strategic objectives. Our Aluminum Wheel and Gunite manufacturing equipment launches and the consolidation of manufacturing operations at Gunite and Imperial will be completed by year-end. Long-term industry fundamentals remain intact, pointing to a recovery over the next several years. We are confident that the actions we are taking will make Accuride a much stronger and more dependable company for our customers and shareholders.”
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