American Axle & Manufacturing Holdings has reported a 53.80 percent jump in profit for the quarter ended Sep. 30, 2014. The company has earned $48.60 million, or $0.63 a share in the quarter, compared with $31.60 million, or $0.41 a share for the same period last year.
Revenue during the quarter grew 15.84 percent to $950.80 million from $820.80 million in the previous year period. Gross margin for the quarter expanded 42 basis points over the previous year period to 15.68 percent. Total expenses were 91.05 percent of quarterly revenues, down from 91.78 percent for the same period last year. This has led to an improvement of 73 basis points in operating margin to 8.95 percent.
Operating income for the quarter was $85.10 million, compared with $67.50 million in the previous year period. However, the adjusted EBITDA for the third-quarter stood at $136.10 million compared with $119.20 million in the prior year period. At the same time, adjusted EBITDA margin contracted 21 basis points in the third-quarter to 14.31 percent from 14.52 percent in the last year period.
"In the third quarter of 2014, AAM's financial results were highlighted by strong cash flow and solid profitability driven by continued sales growth and improvements in operational stability and productivity. Based on our progress through the first three quarters of the year, AAM is on track to deliver more than $100 million of positive free cash flow for the full year 2014," said David C. Dauch, AAM's Chairman, President & chief executive officer.
"AAM's improved free cash flow execution is helping to reduce our balance sheet leverage and is strengthening our ability to invest in the continued development of innovative new product, process and systems technologies designed to provide our customers with measurable gains in fuel efficiency and power density, as well as improved safety, ride and handling performance."
Cash Flow
American Axle & Manufacturing Holdings has generated cash of $231.60 million from operating activities during the nine month period, up 126.39 percent or $129.30 million, when compared with the last year period.
The company has spent $147.70 million cash to meet investing activities during the nine month period as against cash outgo of $148.90 million in the last year period. It has incurred net capital expenditure of $164.70 million on net basis during the nine month period, down 10.49 percent or $19.30 million from year ago period.
The company has spent $16.10 million cash to carry out financing activities during the nine month period as against cash inflow of $103.30 million in the last year period. It has borrowed net of $16.70 million through debt. It has raised net of $0.90 million by selling common stocks.
Cash and cash equivalents stood at $219 million as on Sep. 30, 2014, up 84.65 percent or $100.40 million from $118.60 million on Sep. 30, 2013.
Working Capital
American Axle & Manufacturing Holdings has recorded an increase in the working capital over the last year. It stood at $438.40 million as at Sep. 30, 2014, up 13.11 percent or $50.80 million from $387.60 million on Sep. 30, 2013. Current ratio was at 1.59 as on Sep. 30, 2014, up from 1.55 on Sep. 30, 2013.
Cash conversion cycle (CCC) has decreased to 32 days for the quarter from 35 days for the last year period. Days sales outstanding went down to 60 days for the quarter compared with 65 days for the same period last year.
Days inventory outstanding has decreased to 29 days for the quarter compared with 32 days for the previous year period. At the same time, days payable outstanding went down to 58 days for the quarter from 62 for the same period last year.
Debt Level
American Axle & Manufacturing Holdings has recorded a decline in total debt over the last one year. It stood at $1,542.60 million as on Sep. 30, 2014, down 1.91 percent or $30 million from $1,572.60 million on Sep. 30, 2013.
Total debt was 47.82 percent of total assets as on Sep. 30, 2014, compared with 50.43 percent on Sep. 30, 2013. Debt to equity ratio was at 9.11 as on Sep. 30, 2014, up from 33.60 as on Sep. 30, 2013. Interest coverage ratio improved to 3.39 for the quarter from 2.25 for the same period last year.
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