Accuride Corporation Reports Third Quarter 2012 Results, Revises Guidance

Industry ConditionsNorth American truck fleets have scaled back their rate of equipment replacement from historic patterns and are managing their businesses more conservatively in a weak economic environment. Truck fleets’ conservatism translated into weak Class 8 truck orders in the third quarter, leading OEMs to abruptly reduce their production schedules as they depleted their order backlogs. Equipment orders are expected to improve in the fourth quarter as the industry’s traditional peak order season arrives; however, overall Class 8 production will likely remain lower into the first half of 2013. Medium-duty truck production continues improving at a modest pace, while trailer builds are expected to remain stable through year-end.

Third Quarter Business Segment Results

Accuride WheelsAccuride Wheels segment net sales were $98.3 million, down $7.7 million, or 7.3 percent, from the same period in 2011, due to lower year-over-year build rates and declining aftermarket orders in the face of increased offshore competition. Wheels’ Adjusted EBITDA was $19.4 million, a decrease of $6.1 million, or 24.1 percent from the third quarter of 2011. Year-over-year, earnings were impacted by increased material costs and pricing of $4.5 million. Installation of additional aluminum wheel capacity at our Camden and Monterrey plants remained on schedule in the quarter, which will position the company to gain share in this growing segment. The abrupt decline in customer orders created a challenging operating environment, requiring us to take aggressive cost reduction measures in response.

GuniteGunite segment net sales were $49.6 million, down $13.8 million, or 21.8 percent, from the third quarter of 2011, attributable primarily to the impact of low-cost offshore competitors, customer schedule changes and recent business losses. Gunite’s Adjusted EBITDA was negative $1.7 million, compared to negative $1.4 million in the third quarter of 2011. Gunite’s major capital investment program to install efficient machining and assembly equipment, upgrade casting operations and consolidate manufacturing operations is on schedule to conclude before year-end. In response to industry weakness and Navistar’s and Paccar’s decisions to no longer offer Gunite hub and drum assemblies as standard equipment, Gunite eliminated shifts, resized its workforce and will accelerate the consolidation of machining operations from the Elkhart and Brillion facilities into the Rockford operation by the end of November. We continue to discuss opportunities with Navistar and Paccar to minimize the impact of these decisions.

Brillion Iron WorksBrillion Iron Works’ third quarter net sales were $39.4 million, up $2.7 million, or 7.2 percent, from the third quarter of 2011, while Adjusted EBITDA was $3.8 million, an increase of $2.1 million, or 129.6 percent, from the third quarter of 2011. After strong first-half demand, conditions quickly declined during the quarter due to weakness in Brillion’s core industrial, construction, and oil and gas markets. Brillion responded by resizing its workforce in early September to the new level of demand.

ImperialImperial segment’s third quarter net sales were $28.0 million, a decline of $6.7 million, or 19.4 percent, over the same period in 2011 due to the drop in OEM customer production volumes. Imperial’s Adjusted EBITDA declined to negative $1.6 million in the current quarter from a positive $2.0 million in last year’s third quarter. We continue to work through operational challenges in our Decatur, Texas facility, which have delayed the consolidation of the Portland, Tenn. facility during the first half of 2012. We now expect to complete the repair and transfer of the remaining equipment in the first quarter of 2013.

Liquidity and DebtAs of September 30, 2012, total debt was $323.9 million, consisting of $303.9 million of our outstanding 9.5% senior secured notes, net of discount, and a $20.0 million draw on our ABL facility. As of September 30, 2012, the Company had $20.3 million of cash plus $59.4 million in availability under its ABL credit facility for total liquidity of $79.7 million. Despite lower earnings in the quarter, the Company’s positive operating cash flow partially offset its capital spending of $18.6 million in the quarter.

Outlook and Summary“Although current and near-term North American Class 8 production is weaker than we originally anticipated, long-term industry fundamentals remain positive,” Dauch said. “That is why we’re confident that our strategic investments to streamline and fix our core operations will serve us well when the industry cycle strengthens. We are responding aggressively to the near-term weakness and customer decisions by taking cost out of the business, but not at the expense of jeopardizing our efforts to fundamentally fix our business. As we plan for 2013, we expect Class 8 builds to be in the range of 220,000 to 230,000 units. Capital spending will be reduced by approximately 40 to 50 percent year-over-year, primarily reflecting the completion of our recent capital investment projects. We remain focused on ensuring Accuride’s long-term success. Our 2011-2012 actions to fix the business will make us much stronger and more dependable for our customers and shareholders in the future.”

Revised 2012 Financial GuidanceBased on our first nine months’ results and projections for the remainder of the year, Accuride management now expects its 2012 net sales to be in the range of $900 to $925 million, and a fully diluted loss per share of between $1.00 and $0.89 – including Elkhart closure costs and other one-time severance-related costs totaling $0.11 per share – and Adjusted EBITDA now ranging from $60 to $65 million for the year. The revised guidance reflects the likelihood of continued weakness in North American Class 8 truck orders and the resulting impact on customer production schedules during the fourth quarter.

Earnings Conference Call InformationAccuride will hold a conference call to discuss its Third Quarter 2012 financial and operational results on Friday, November 2, 2012, beginning at 9:00 a.m. Central Time. Analysts and investors may participate on the live conference call by dialing [phone] in the United States, or [phone] internationally, and using participant code 33645018. A live webcast of the conference call can be accessed via the Investors section of the Company’s website at Accuridecorp.com/investors. A replay of the call will be available from November 2, 2012 at 11:30 a.m. to November 9, 2012 at 11:59 p.m. Central Time by calling [phone] in the United States, or [phone] internationally, and using access code 33645018.

About Accuride CorporationWith headquarters in Evansville, Ind., USA, Accuride Corporation is a leading supplier of components to the North American 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 ^®, Accuride Wheel End Solutions ^TM, 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 September 30,
(Dollars in thousands)					2012							2011
Net sales:
Wheels					$	98,290			45.7	%		$	105,994			44.0	%
Gunite						49,592			23.0	%			63,421			26.3	%
Brillion Iron Works						39,373			18.3	%			36,721			15.3	%
Imperial Group						27,956			13.0	%			34,693			14.4	%
Total net sales					$	215,211			100	%		$	240,829			100	%
Gross Profit					$	4,130			1.9	%		$	19,238			8.0	%
Income (loss) from Operations:
Wheels					$	9,302			9.5	%		$	15,408			14.5	%
Gunite						(8,076	)		(16.3	)%			(3,083	)		(4.9	)%
Brillion Iron Works						2,510			6.4	%			367			1.0	%
Imperial Group						(1,891	)		(6.8	)%			287			0.8	%
Corporate / Other						(11,524	)		—	%			(8,488	)		—	%
Consolidated Total					$	(9,679	)		(4.5	)%		$	4,491			1.9	%
Net loss					$	(17,679	)		(8.4	)%		$	(17,220	)		(7.2	)%
Adjusted EBITDA
Wheels					$	19,396			19.7	%		$	25,544			24.1	%
Gunite						(1,657	)		(3.3	)%			(1,365	)		(2.2	)%
Brillion Iron Works						3,757			9.5	%			1,636			4.4	%
Imperial Group						(1,610	)		(5.8	)%			1,963			5.7	%
Corporate / Other						(9,160	)		—	%			(8,499	)		—	%
Continuing Operations					$	10,726			5.0	%		$	19,279			8.0	%
Bostrom Seating						—			—	%			—			—	%
Fabco Automotive						—			—	%			2,933			—	%
Consolidated Total					$	10,726			5.0	%		$	22,212			9.2	%

Nine Months Operating Results
					Nine Months Ended September 30,
(Dollars in thousands)					2012							2011
Net sales:
Wheels					$	328,115			43.5	%		$	300,430			43.3	%
Gunite						185,435			24.6	%			189,745			27.4	%
Brillion Iron Works						132,509			17.6	%			110,175			15.9	%
Imperial Group						107,453			14.3	%			93,246			13.4	%
Total net sales					$	753,512			100	%		$	693,596			100	%
Gross Profit					$	51,055			6.8	%		$	58,972			8.5	%
Income (loss) from Operations:
Wheels					$	43,850			13.4	%		$	39,032			13.0	%
Gunite						(12,119	)		(6.5	)%			(1,007	)		(0.5	)%
Brillion Iron Works						13,281			10.0	%			1,789			1.6	%
Imperial Group						(2,712	)		(2.5	)%			3,178			3.4	%
Corporate / Other						(35,151	)		—	%			(28,600	)		—	%
Consolidated Total					$	7,149			0.9	%		$	14,392			2.1	%
Net loss					$	(21,469	)		(2.8	)%		$	(21,104	)		(3.0	)%
Adjusted EBITDA
Wheels					$	73,532			22.4	%		$	69,255			23.1	%
Gunite						(83	)		(0.0	)%			5,381			2.8	%
Brillion Iron Works						16,999			12.8	%			6,282			5.7	%
Imperial Group						(1,921	)		(1.8	)%			4,908			5.3	%
Corporate / Other						(30,850	)		—	%			(29,218	)		—	%
Continuing Operations					$	57,677			7.7	%		$	56,608			8.2	%
Bostrom Seating						—			—	%			(22	)		—	%
Fabco Automotive						—			—	%			5,172			—	%
Consolidated Total					$	57,677			7.7	%		$	61,758			8.9	%

ACCURIDE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)
					Three Months Ended September 30,								Nine Months Ended September 30,
(in thousands except per share data)					2012				2011				2012				2011
NET SALES					$	215,211			$	240,829			$	753,512			$	693,596
COST OF GOODS SOLD					211,081				221,591				702,457				634,624
GROSS PROFIT					4,130				19,238				51,055				58,972
OPERATING EXPENSES:
Selling, general and administrative					13,809				14,747				43,906				44,580
INCOME (LOSS) FROM OPERATIONS					(9,679		)		4,491				7,149				14,392
OTHER INCOME (EXPENSE):
Interest expense, net					(8,921		)		(8,824		)		(26,324		)		(25,564		)
Other income (loss), net					815				809				536				3,205
LOSS BEFORE INCOME TAXES FROM CONTINUING OPERATIONS					(17,785		)		(3,524		)		(18,639		)		(7,967		)
INCOME TAX PROVISION (BENEFIT)					(106		)		10,032				2,830				10,424
LOSS FROM CONTINUING OPERATIONS					(17,679		)		(13,556		)		(21,469		)		(18,391		)
DISCONTINUED OPERATIONS, NET OF TAX					—				(3,664		)		—				(2,713		)
NET LOSS					$	(17,679	)		$	(17,220	)		$	(21,469	)		$	(21,104	)
Weighted average common shares outstanding—basic					47,408				47,295				47,368				47,271
Basic loss per share – continuing operations					$	(0.37	)		$	(0.28	)		$	(0.45	)		$	(0.39	)
Basic loss per share – discontinued operations					—				(0.08		)		—				(0.06		)
Basic loss per share					$	(0.37	)		$	(0.36	)		$	(0.45	)		$	(0.45	)
Weighted average common shares outstanding—diluted					47,408				47,295				47,368				47,271
Diluted loss per share – continuing operations					$	(0.37	)		$	(0.28	)		$	(0.45	)		$	(0.39	)
Diluted loss per share – discontinued operations					—				(0.08		)		—				(0.06		)
Diluted loss per share					$	(0.37	)		$	(0.36	)		$	(0.45	)		$	(0.45	)
OTHER COMPREHENSIVE LOSS, NET OF TAX:
Foreign currency translation adjustments					(317		)		353				(356		)		206
COMPREHENSIVE LOSS					$	(17,996	)		$	(16,867	)		$	(21,825	)		$	(20,898	)

ACCURIDE CORPORATION CONSOLIDATED ADJUSTED EBITDA (UNAUDITED)
					Three Months Ended September 30,
(In thousands)					2012				2011
Net income (loss)					$	(17,679	)		$	(17,220	)
Income tax expense (benefit)					(106		)		9,643
Interest expense, net					8,921				8,824
Depreciation and amortization					13,153				12,112
Restructuring, severance and other charges 1					6,587				2,433
Other items related to our credit agreement 2					(150		)		6,420
Adjusted EBITDA					$	10,726			$	22,212

Note:
1)			For the three months ended September 30, 2012, Adjusted EBITDA represents net income before net interest expense, income tax expense, depreciation and amortization, plus $6.6 million in costs associated with restructuring items. For the three months ended September 30, 2011, Adjusted EBITDA represents net income before net interest expense, income tax benefit, depreciation and amortization, plus $2.4 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 September 30, 2012, items related to our credit agreement consisted of foreign currency income and other income or expenses of $0.2 million. For the three months ended September 30, 2011, items related to our credit agreement consisted of foreign currency losses and other income or expenses of $6.4 million	.

					Nine Months Ended September 30,
(In thousands)					2012				2011
Net loss					$	(21,469	)		$	(21,104	)
Income tax expense					2,830				10,034
Interest expense, net					26,324				25,564
Depreciation and amortization					38,465				38,065
Restructuring, severance and other charges 1					9,683				3,734
Other items related to our credit agreement 2					1,844				5,465
Adjusted EBITDA					$	57,677			$	61,758

Note:
1)			For the nine months ended September 30, 2012, Adjusted EBITDA represents net income before net interest expense, income tax expense, depreciation and amortization, plus $9.7 million in costs associated with restructuring items. For the nine months ended September 30, 2011, Adjusted EBITDA represents net income before net interest expense, income tax expense, depreciation and amortization, plus $3.7 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 nine months ended September 30, 2012, items related to our credit agreement consisted of foreign currency income and other income or expenses of $1.8 million. For the nine months ended September 30, 2011, items related to our credit agreement consisted of foreign currency losses and other income or expenses of $5.5 million	.

ACCURIDE CORPORATION SEGMENT ADJUSTED EBITDA RECONCILIATION (UNAUDITED)
					Three Months Ended September 30, 2012
(In thousands)					Income (loss) from Operations				Depreciation and Amortization			Other			Adjusted EBITDA
Wheels					$	9,302			$	8,333		$	1,761		$	19,396
Gunite						(8,076	)			2,655			3,764			(1,657	)
Brillion Iron Works						2,510				1,217			30			3,757
Imperial Group						(1,891	)			256			25			(1,610	)
Corporate / Other						(11,524	)			692			1,672			(9,160	)
Continuing Operations					$	(9,679	)		$	13,153		$	7,252		$	10,726
Bostrom						—				—			—			—
Fabco Automotive						—				—			—			—
Consolidated Total					$	(9,679	)		$	13,153		$	7,252		$	10,726
					Three Months Ended September 30, 2011
(In thousands)					Income (loss) from Operations				Depreciation and Amortization			Other			Adjusted EBITDA
Wheels					$	15,408			$	8,252		$	1,884		$	25,544
Gunite						(3,083	)			1,671			47			(1,365	)
Brillion Iron Works						367				1,242			27			1,636
Imperial Group						287				175			1,501			1,963
Corporate / Other						(8,488	)			420			(431	)		(8,499	)
Continuing Operations					$	4,491			$	11,760		$	3,028		$	19,279
Bostrom						—				—			—			—
Fabco Automotive						2,581				352			—			2,933
Consolidated Total					$	7,072			$	12,112		$	3,028		$	22,212
					Nine Months Ended September 30, 2012
(In thousands)					Income (loss) from Operations				Depreciation and Amortization			Other			Adjusted EBITDA
Wheels					$	43,850			$	24,443		$	5,239		$	73,532
Gunite						(12,119	)			7,772			4,264			(83	)
Brillion Iron Works						13,281				3,628			90			16,999
Imperial Group						(2,712	)			716			75			(1,921	)
Corporate / Other						(35,151	)			1,906			2,395			(30,850	)
Continuing Operations					$	7,149			$	38,465		$	12,063		$	57,677
Bostrom						—				—			—			—
Fabco Automotive						—				—			—			—
Consolidated Total					$	7,149			$	38,465		$	12,063		$	57,677
					Nine Months Ended September 30, 2011
(In thousands)					Income (loss) from Operations				Depreciation and Amortization			Other			Adjusted EBITDA
Wheels					$	39,032			$	24,933		$	5,290		$	69,255
Gunite						(1,007	)			6,008			380			5,381
Brillion Iron Works						1,789				4,409			84			6,282
Imperial Group						3,178				179			1,551			4,908
Corporate / Other						(28,600	)			1,078			(1,696	)		(29,218	)
Continuing Operations					$	14,392			$	36,607		$	5,609		$	56,608
Bostrom						(112	)			90			—			(22	)
Fabco Automotive						3,804				1,368			—			5,172
Consolidated Total					$	18,084			$	38,065		$	5,609		$	61,758

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)
					September 30,				December 31,
(In thousands)					2012				2011
ASSETS
CURRENT ASSETS:
Cash and cash equivalents					$	20,269			$	56,915
Customer and other receivables					89,527				98,075
Inventories, net					70,382				72,827
Other current assets					12,024				12,332
Total current assets					192,202				240,149
PROPERTY, PLANT AND EQUIPMENT, net					296,726				271,562
OTHER ASSETS:
Goodwill and other assets					346,628				357,151
TOTAL					$	835,556			$	868,862
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable					$	63,268			$	80,261
Other current liabilities					44,870				48,228
Total current liabilities					108,138				128,489
LONG-TERM DEBT					323,870				323,082
OTHER LIABILITIES					165,820				159,908
STOCKHOLDERS’ EQUITY:
Total stockholders’ equity					237,728				257,383
TOTAL					$	835,556			$	868,862

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