PLYMOUTH, Mich., May 7, 2015 /PRNewswire/ -- Metaldyne
Performance Group Inc. "MPG", (NYSE: MPG), a leading provider of
highly-engineered components for use in powertrain and
safety-critical platforms for the global light, commercial and
industrial vehicle markets, today reported the following financial
results for its first quarter ended March
29, 2015.
First Quarter Financial Highlights:
- Net sales of $765.2 million,
compared to $540.5 million in Q1 of
2014, representing a year-over-year increase of 42%.
- Gross profit of $128.5 million
for the quarter was $45.3 million
higher than 2014, an increase of 54%.
- Net income was $32.6 million,
resulting in diluted earnings per share of $0.47.
- Adjusted EBITDA of $132.6
million, compared to $99.7
million for the first quarter of 2014, representing a
year-over-year increase of 33%. Adjusted EBITDA margins remained
strong at 17.3%.
- Capital expenditures of $60.7
million.
- Adjusted Free Cash Flow, defined as Adjusted EBITDA less
capital expenditures, was $71.9
million.
Recent Treasury Actions:
- MPG paid a voluntary repayment of $10.0
million on its outstanding Senior Term Loan during the first
quarter of 2015.
- MPG's board of directors declared a quarterly cash dividend of
$0.09 per share of common stock
payable on May 26th, 2015
for those stockholders of record as of May
12th, 2015.
- MPG expects to secure a refinancing of its outstanding term
loan. The anticipated terms would reduce annual cash debt service
by $6 – 7 million and create an FX
hedge by converting a portion of its USD denominated term loan into
a Euro denominated term loan under the same facility.
Commenting on the Company's results, George Thanopoulos, Chief Executive Officer of
MPG, stated, "During the first quarter, we actively managed our
business to account for the recent metals market fluctuations and
FX changes, resulting in strong Adjusted EBITDA, Adjusted EBITDA
margins and Adjusted Free Cash Flow. Additionally, we took
several actions to drive value creation, namely our continued
reinvestment in the business, the declaration of our first
dividend, the voluntary pre-payment of debt and, finally, seeking a
debt refinancing to reduce cash debt service. These actions
highlight MPG's cash flow model and its ability to provide a
balanced approach to value creation."
Business Outlook:
For fiscal 2015, MPG re-affirmed
the guidance provided earlier in the year:
- Net sales between $3.0 and $3.15
billion
- Adjusted EBITDA between $520 and $560
million
- Capital expenditures between $210 and
$220 million
Conference Call:
The Company will hold a conference
call to discuss its first quarter 2015 results today at
8:00 a.m. ET. A live webcast of the
call may be accessed over the Internet from the Company's Investor
Relations website at investors.mpgdriven.com. Participants should
follow the instructions provided on the website to download and
install the necessary audio applications. The dial-in phone number
for the conference call is 1-877-201-0168 and the international
dial-in number is 1-647-788-4901. Participants should ask for the
MPG first quarter 2015 earnings conference call.
For those unable to participate in the conference call, a replay
will be available from 11:00 a.m. ET
on May 7 until 11:59 p.m. ET on May
14. The replay dial-in phone number is 1-855-859-2056 and
the international replay dial-in number is 1-404-537-3406. The
replay passcode is 28380180.
About MPG:
Metaldyne Performance Group Inc. is a
leading provider of highly-engineered components for use in
powertrain and safety-critical platforms for the global light,
commercial and industrial vehicle markets. MPG produces these
components using complex metal-forming manufacturing technologies
and processes for a global customer base of vehicle OEMs and Tier I
suppliers. MPG's metal-forming manufacturing technologies and
processes include aluminum die casting, forging, iron casting and
powder metal forming as well as advanced machining and assembly.
Headquartered in Plymouth, Michigan, MPG has a global footprint spanning
61 locations in 13 countries across North America, South
America, Europe and Asia with approximately
12,000 employees. For more information, visit
www.mpgdriven.com.
Cautionary Note Regarding Forward-Looking
Statements:
The information provided in this press
release contains certain "forward-looking statements" about MPG's
financial results and estimates and business prospects within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements may be identified by words such as
"expects," "intends," "anticipates," "plans," "project,"
"believes," "seeks," "targets," "forecast," "estimates," "will" or
other words of similar meaning and include, but are not limited to,
statements regarding the outlook for the Company's future business,
prospects, and financial performance; the industry outlook, our
backlog and our 2015 financial guidance. Forward-looking statements
are based on management's current expectations and assumptions,
which are subject to inherent uncertainties, risks, and changes in
circumstances that are difficult to predict. Actual outcomes and
results may differ materially due to global political, economic,
business, competitive, market, regulatory, and other factors and
risks, including, but not limited to, the following: volatility in
the global economy impacting demand for new vehicles and our
products; a decline in vehicle production levels, particularly with
respect to platforms for which we are a significant supplier, or
the financial distress of any of our major customers; seasonality
in the automotive industry; our significant competition; our
dependence on large-volume customers for current and future sales;
a reduction in outsourcing by our customers, the loss or
discontinuation of material production or programs, or a failure to
secure sufficient alternative programs; our failure to offset
continuing pressure from our customers to reduce our prices; our
inability to realize all of the sales expected from awarded
business or fully recover pre-production costs; our failure to
increase production capacity or over-expanding our production in
times of overcapacity; our reliance on key machinery and tooling to
manufacture components for powertrain and safety-critical systems
that cannot be easily replicated; program launch difficulties; a
disruption in our supply or delivery chain which causes one or more
of our customers to halt production; work stoppages or production
limitations at one or more of our customer's facilities; a
catastrophic loss of one of our key manufacturing facilities;
failure to protect our know-how and intellectual property; the
disruption or harm to our business as a result of any acquisitions
or joint ventures we make; a significant increase in the prices of
raw materials and commodities we use; the damage to or termination
of our relationships with key third-party suppliers; our failure to
maintain our cost structure; the incurrence of significant costs if
we close any of our manufacturing facilities; potential significant
costs at our facility in Sandusky,
Ohio; the failure of or disruptions in our information
technology networks and systems, or the inability to successfully
implement upgrades to our enterprise resource planning systems; the
incurrence of significant costs, liabilities, and obligations as a
result of environmental requirements and other regulatory risks;
extensive and growing governmental regulations; the adverse impact
of climate change and related energy legislation and regulation;
the incurrence of material costs related to legal proceedings; our
inability to recruit and retain key personnel; any failure to
maintain satisfactory labor relations; pension and other
postretirement benefit obligations; risks related to our global
operations; competitive threats posed by global operations and
entering new markets; foreign exchange rate fluctuations; increased
costs and obligations as a result of becoming a public company; the
failure of our internal controls to meet the standards required by
Sarbanes-Oxley; our substantial indebtedness; our inability, or the
inability of our customers or our suppliers, to obtain and maintain
sufficient debt financing, including working capital lines; our
exposure to a number of different tax uncertainties; the mix of
profits and losses in various jurisdictions adversely affecting our
tax rate; disruption from the combination of our operations and
diversion of management's attention; our limited history of working
as a single company and the inability to integrate HHI, Metaldyne,
and Grede successfully and achieve the anticipated benefits.
For the reasons described above, we caution you against relying
on any forward-looking statements, which should also be read in
conjunction with the other cautionary statements that are included
elsewhere in this press release and in our public filings,
including under the heading "Risk Factors" in our filings that we
make from time to time with the Securities and Exchange Commission.
You should not consider any list of such factors to be an
exhaustive statement of all of the risks, uncertainties, or
potentially inaccurate assumptions that could cause our current
expectations or beliefs to change. Further, any forward-looking
statement speaks only as of the date on which it is made, and we
undertake no obligation to update or revise any forward-looking
statement to reflect events or circumstances after the date on
which the statement is made or to reflect the occurrence of
unanticipated events, except as otherwise may be required by
law.
Non-GAAP Financial Measures
Adjusted EBITDA
We define Adjusted EBITDA as
net income (loss) before interest expense, provision for (benefit
from) income taxes and depreciation and amortization, with further
adjustments to reflect the additions and eliminations of certain
income statement items, including (i) gains and losses on foreign
currency and fixed assets and debt transaction expenses, (ii)
stock-based compensation and other non-cash charges, (iii) sponsor
management fees and other income and expense items that we consider
to be not indicative of our ongoing operations, (iv) specified
non-recurring items and (v) other adjustments.
We believe Adjusted EBITDA is used by investors as a
supplemental measure to evaluate the overall operating performance
of companies in our industry. Management uses Adjusted EBITDA (i)
as a measurement to compare our operating performance on a
consistent basis, (ii) to calculate incentive compensation for our
employees, (iii) for planning purposes, including the preparation
of our internal annual operating budget, (iv) to evaluate the
performance and effectiveness of our operational strategies and (v)
to assess compliance with various metrics associated with our
agreements governing our indebtedness. Accordingly, we believe that
Adjusted EBITDA provides useful information to investors and others
in understanding and evaluating our operating performance in the
same manner as our management.
For a reconciliation of Adjusted EBITDA to net income, the most
directly comparable measure determined under U.S. generally
accepted accounting principles ("GAAP"), see "US GAAP
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA AND ADJUSTED FREE
CASH FLOW".
Adjusted Free Cash Flow
We define Adjusted Free
Cash Flow as Adjusted EBITDA less capital expenditures. Capital
expenditures can be found in our consolidated statements of cash
flows as a component of cash flows from investing activities. We
present Adjusted Free Cash Flow because our management considers it
to be a useful, supplemental indicator of our performance. When
measured over time, Adjusted Free Cash Flow provides supplemental
information to investors concerning our results of operations and
our ability to generate cash flows to satisfy mandatory debt
service requirements and make other non-discretionary
expenditures.
For a reconciliation of Adjusted Free Cash Flow to net income,
the most directly comparable GAAP measure, see "US GAAP
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA AND ADJUSTED FREE
CASH FLOW".
Contacts
Investor Relations
Paul Suber
Vice President, Business Development & Investor Relations
investors@mpgdriven.com
248-440-9503
METALDYNE
PERFORMANCE GROUP INC.
|
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
(In millions
except per share data)
|
|
|
|
|
March
29,
2015
|
|
December 31,
2014
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
132.0
|
|
156.5
|
Receivables,
net:
|
|
|
|
Trade
|
403.4
|
|
312.9
|
Other
|
32.3
|
|
31.9
|
|
|
|
|
Total receivables,
net
|
435.7
|
|
344.8
|
Inventories
|
193.4
|
|
204.8
|
Deferred income
taxes
|
11.1
|
|
12.4
|
Prepaid
expenses
|
16.2
|
|
13.0
|
Other
assets
|
12.8
|
|
14.5
|
|
|
|
|
Total current
assets
|
801.2
|
|
746.0
|
Property and
equipment, net
|
742.8
|
|
750.2
|
Goodwill
|
907.7
|
|
907.7
|
Amortizable
intangible assets, net
|
761.1
|
|
778.5
|
Deferred income
taxes, noncurrent
|
2.2
|
|
1.4
|
Other
assets
|
39.9
|
|
40.8
|
|
|
|
|
Total
assets
|
$
3,254.9
|
|
3,224.6
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
293.1
|
|
285.5
|
Accrued
compensation
|
44.2
|
|
50.9
|
Accrued
liabilities
|
109.7
|
|
79.9
|
Short-term
debt
|
2.0
|
|
1.6
|
Current maturities,
long-term debt and capital lease obligations
|
16.1
|
|
16.5
|
|
|
|
|
Total current
liabilities
|
465.1
|
|
434.4
|
Long-term debt, less
current maturities
|
1,910.5
|
|
1,920.3
|
Capital lease
obligations, less current maturities
|
22.8
|
|
23.4
|
Deferred income
taxes
|
259.9
|
|
260.7
|
Other long-term
liabilities
|
57.7
|
|
60.8
|
|
|
|
|
Total
liabilities
|
2,716.0
|
|
2,699.6
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
Common Stock: par
$0.001, 400 authorized, 67.1 issued and outstanding
|
0.1
|
|
0.1
|
Paid-in
capital
|
830.5
|
|
827.3
|
Deficit
|
(243.3 )
|
|
(269.7)
|
Accumulated other
comprehensive loss
|
(51.0 )
|
|
(35.2 )
|
|
|
|
|
Total equity
attributable to stockholders
|
536.3
|
|
522.5
|
Noncontrolling
interest
|
2.6
|
|
2.5
|
|
|
|
|
Total stockholders'
equity
|
538.9
|
|
525.0
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
3,254.9
|
|
3,224.6
|
|
|
|
|
METALDYNE
PERFORMANCE GROUP INC.
|
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(In millions
except per share amounts)
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
March 29,
2015
|
|
March 30,
2014
|
Net sales
|
$
765.2
|
|
540.5
|
Cost of
sales
|
636.7
|
|
457.2
|
|
|
|
|
Gross
profit
|
128.5
|
|
83.3
|
Selling, general and
administrative expenses
|
56.2
|
|
29.2
|
|
|
|
|
Operating
income
|
72.3
|
|
54.1
|
Interest expense,
net
|
27.6
|
|
19.4
|
Loss on debt
extinguishment
|
—
|
|
0.3
|
Other, net
|
(5.2 )
|
|
1.2
|
|
|
|
|
Other expense,
net
|
22.4
|
|
20.9
|
|
|
|
|
Income before
tax
|
49.9
|
|
33.2
|
Income tax
expense
|
17.3
|
|
10.5
|
|
|
|
|
Net income
|
32.6
|
|
22.7
|
Income attributable
to noncontrolling interest
|
0.2
|
|
0.1
|
|
|
|
|
Net income
attributable to stockholders
|
$
32.4
|
|
22.6
|
|
|
|
|
Weighted average
shares outstanding
|
67.1
|
|
67.1
|
Cash dividends
declared per share
|
$
0.09
|
|
—
|
Net income per share
attributable to stockholders
|
|
|
|
Basic
|
0.48
|
|
0.34
|
Diluted
|
0.47
|
|
0.33
|
METALDYNE
PERFORMANCE GROUP INC.
|
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
(In
millions)
|
|
|
|
|
Quarter
Ended
|
|
March 29,
2015
|
|
March 30,
2014
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
32.6
|
|
22.7
|
Adjustments to
reconcile net income to cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
56.4
|
|
42.7
|
Debt fee
amortization
|
0.8
|
|
2.1
|
Loss on fixed asset
dispositions
|
0.2
|
|
0.7
|
Deferred income
taxes
|
(0.3 )
|
|
(1.3 )
|
Noncash interest
expense
|
0.2
|
|
0.2
|
Stock-based
compensation expense
|
3.3
|
|
1.3
|
Foreign currency
adjustment
|
0.5
|
|
—
|
Other
|
0.1
|
|
0.2
|
Changes in assets and
liabilities:
|
|
|
|
Receivables,
net
|
(101.0 )
|
|
(58.1 )
|
Inventories
|
7.0
|
|
—
|
Accounts payable,
accrued liabilities and accrued compensation
|
60.7
|
|
34.7
|
Other,
current
|
(7.6 )
|
|
0.5
|
Other
|
(0.3 )
|
|
7.3
|
|
|
|
|
Net cash provided by
operating activities
|
52.6
|
|
53.0
|
Cash flow from
investing activities:
|
|
|
|
Capital
expenditures
|
(60.7 )
|
|
(30.8 )
|
Proceeds from sale of
fixed assets
|
0.1
|
|
0.1
|
Capitalized patent
costs
|
(0.1 )
|
|
(0.1 )
|
|
|
|
|
Net cash used for
investing activities
|
(60.7 )
|
|
(30.8 )
|
Cash flows from
financing activities:
|
|
|
|
Payments on long-term
debt
|
(10.2 )
|
|
(0.6 )
|
Borrowings of
revolving lines of credit
|
—
|
|
89.8
|
Payments of revolving
lines of credit
|
—
|
|
(95.9 )
|
Other debt,
net
|
(0.5 )
|
|
(1.5 )
|
Payment of offering
related costs
|
(0.1 )
|
|
—
|
Other stock
activity
|
—
|
|
0.3
|
|
|
|
|
Net cash provided by
(used for) financing activities
|
(10.8 )
|
|
(7.9)
|
Effect of exchange
rates on cash
|
(5.6 )
|
|
(0.4 )
|
|
|
|
|
Net increase in cash
and cash equivalents
|
$ (24.5
)
|
|
13.9
|
|
|
|
|
Cash and cash
equivalents:
|
|
|
|
Cash and cash
equivalents, beginning of period
|
$
156.5
|
|
68.2
|
Net decrease in cash
and cash equivalents
|
(24.5 )
|
|
13.9
|
|
|
|
|
Cash and cash
equivalents, end of period
|
$
132.0
|
|
82.1
|
|
|
|
|
Supplementary cash
flow information:
|
|
|
|
Cash paid for income
taxes, net
|
$
4.9
|
|
3.1
|
Cash paid for
interest
|
16.0
|
|
0.5
|
Noncash
transactions:
|
|
|
|
Capital expenditures
in accounts payables
|
21.6
|
|
9.4
|
METALDYNE
PERFORMANCE GROUP INC.
|
|
|
US GAAP
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA
|
|
|
AND ADJUSTED FREE
CASH FLOW
|
|
|
|
|
|
(In
millions)
|
|
|
|
|
|
|
|
Q1
|
|
Q1
|
|
|
|
|
2015
|
|
2014
|
|
|
Net income
attributable to stockholders
|
|
$ 32.4
|
|
22.6
|
|
|
Income attributable
to noncontrolling interest
|
|
0.2
|
|
0.1
|
|
|
Net
income
|
|
32.6
|
|
22.7
|
|
|
|
|
|
|
|
|
|
Addbacks to Arrive
at Unadjusted EBITDA
|
|
|
|
|
|
|
Interest expense,
net
|
|
27.6
|
|
19.4
|
|
|
|
|
|
|
|
|
|
Loss on debt
extinguishment
|
|
−
|
|
0.3
|
|
|
Income tax
expense
|
|
17.3
|
|
10.5
|
|
|
Depreciation and
amortization
|
|
56.4
|
|
42.7
|
|
|
Unadjusted
EBITDA
|
|
133.9
|
|
95.6
|
|
|
|
|
|
|
|
|
|
Adjustments to
Arrive at Adjusted EBITDA
|
|
|
|
|
|
|
Gain on foreign
currency
|
|
(5.0)
|
|
(0.1)
|
|
|
Loss on fixed
assets
|
|
0.2
|
|
0.7
|
|
|
Debt transaction
expenses
|
|
0.1
|
|
1.2
|
|
|
Stock-based
compensation expense
|
|
3.3
|
|
1.3
|
|
|
Sponsor management
fees
|
|
—
|
|
1.0
|
|
|
Non-recurring
acquisition and purchase accounting related items
|
|
(0.3)
|
|
—
|
|
|
Non-recurring
operational items
|
|
0.4
|
|
—
|
|
|
Adjusted
EBITDA
|
|
132.6
|
|
99.7
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
60.7
|
|
30.8
|
|
|
|
|
|
|
|
|
|
Adjusted Free Cash
Flows
|
|
$
71.9
|
|
68.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
METALDYNE
PERFORMANCE GROUP INC.
|
|
US GAAP
RECONCILATION FOR GUIDANCE
|
|
(In millions
except per share data)
|
|
|
|
|
|
|
|
2015
Guidance
|
|
2015
Guidance
|
|
|
Low End of
Range
|
|
High End of
Range
|
|
Net income
attributable to stockholders
|
$102.5
|
|
127.8
|
|
Income attributable
to noncontrolling interest
|
0.4
|
|
0.5
|
|
Net
income
|
102.9
|
|
128.3
|
|
|
|
|
|
|
Addbacks to Arrive
at Unadjusted EBITDA
|
|
|
|
|
Interest expense,
net
|
117.3
|
|
117.3
|
|
Income tax
expense
|
50.5
|
|
65.1
|
|
Depreciation and
amortization
|
234.2
|
|
234.2
|
|
Unadjusted
EBITDA
|
504.9
|
|
544.9
|
|
|
|
|
|
|
Adjustments to
Arrive at Adjusted EBITDA
|
|
|
|
|
Foreign currency
gains
|
(2.9)
|
|
(2.9)
|
|
Stock-based
compensation expense
|
16.6
|
|
16.6
|
|
Non-recurring
operational items (1)
|
1.4
|
|
1.4
|
|
Adjusted
EBITDA
|
$520.0
|
|
560.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Non-recurring
operational items including charges for disposed operations,
restructuring costs and other.
|
|
|
|
|
Note: The table does
not include the impact of the previously announced repricing of our
Senior Term Loan debt on the various line items above. The
refinancing does not affect Adjusted EBITDA.
|
|
|
|
|
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SOURCE Metaldyne Performance Group Inc.