Attached files
| file | filename |
|---|---|
| 8-K - 8-K - ACCURIDE CORP | acw12-8kq2.htm |
| EX-99.1 - EX-99.1 - ACCURIDE CORP | acw12-99d1.htm |
Second Quarter 2012
Earnings Call
Earnings Call
1
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.
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.
Forward Looking Statements
2
Second Quarter 2012 Earnings
Ø Opening Comments
• CEO Update
• Industry Highlights
• Plan Execution
Ø Financial Information
• Second Quarter Results
• 2012 Outlook
Ø Q&A
Ø Closing Comments
Rick Dauch
President & CEO
Greg Risch
Vice President & CFO
Rick Dauch
Greg Risch
Rick Dauch
3
4
2nd Quarter Highlights
5
• STRONG performance across the Wheels & Brillion business units
• Imperial stabilizing:
• Decatur “under control” operationally - organizationally, delivery, quality, scheduling
• New business wins at Daimler & Navistar ($12 to $15 million)
• CAPEX Projects on schedule and on-budget:
• AL wheel capacity 2-3 weeks ahead of schedule in Camden & Monterrey
• Gunite >25% of new equipment installed and operating
• Cost structure reduction initiatives:
• Steel wheel capacity consolidation & capability studies (London & Mexico facilities)
• Gunite Elkhart, IN facility closure announced
• ERP migration launched
• Class 8 Truck Orders < OEM Builds by +20% ... significant production cuts in 3Q/4Q
• Imperial profitability: TN à TX consolidation delayed 6-8 months from original timing
• Aluminum wheel demand > Accuride capacity (7-day operations)
• Soft Gunite aftermarket demand (offshore pricing impact)
• Unfavorable anti-dumping ruling creating pressure in the steel wheel aftermarket
6
Industry Fundamentals
Average Age: Class 8 Fleet
Carrier Profitability
Real Gross Domestic Product
Class 8 Fleet Utilization
Net Order Weakness
Class 8 Backlog
OEM Momentum
Class 8 Net Orders vs. Builds
Fleet Concerns
• Uncertain global market conditions
• European debt situation
• Middle East political volatility
• US political uncertainty in an election year
• Fuel price volatility
• New CAFE standards on the horizon (2014/2018)
• Lumpy freight associated w/slow economic recovery
• It is difficult to slow production quickly
• We are still at the front end of an upward cycle
(i.e. no one wants to risk losing share)
• OEMs have a “cushion”
• Backlog
• Inventory
• Seasonality of orders (summer weakness)
• Low order cancellation rates
OEM Build Rate Adjustments
Forecasted OEM Build Rates: June vs. July
June
Schedules
Schedules
July
Schedules
Schedules
Source: ACT & FTR
Industry Builds
Class 8 Truck Production
Medium-Duty Truck Production
Trailer Production
11
Strategic Objectives
Ø #1-2 globally in wheel-end systems
Ø ROIC > 20% through a cycle
Ø >80% of revenue from CORE products
Ø Balanced geographical revenues:
• 40% North America
• 30% Asia
• 20% Europe
• 10% South America
Ø >95% retention of personnel
Ø Maximize ACW share price
Accuride Vision: Accuride will be the premier supplier of wheel-end system
solutions to the global commercial vehicle industry
solutions to the global commercial vehicle industry
12
Share
Price
Grow Globally
Create a Competitive
Cost Structure &
LEAN Operating Culture
Divest Non-Core Assets
Fix Core Business & Operations
Customer Centric, Technology Leadership
Ethical People, Selfless Leaders, Team Oriented
Our Focus
“Fix & Grow” Accuride
“Fix” (6-12 months):
• Invest to catch up
• Clean and organize
• Close or fix uncompetitive operations
• Rationalize / consolidate capacity
• Divest non-core assets
• Reassign, release, reduce
• Upgrade from outside
• Standardize
• Understand LEAN
“Grow” (12-18 months):
• Invest to leapfrog
• World class standards
• Open new facilities
• Build and expand
• Acquire “core” assets
• Add and expand
• Promote from within
• Benchmark
• Operate LEAN
Strategic Objectives
Accuride Vision: Accuride will be the premier supplier of wheel-end system
solutions to the global commercial vehicle industry
solutions to the global commercial vehicle industry
14
Share
Price
Grow Globally
Create a Competitive
Cost Structure &
LEAN Operating Culture
Divest Non-Core Assets
Fix Core Business & Operations
Customer Centric, Technology Leadership
Ethical People, Selfless Leaders, Team Oriented
Our Focus
Fix (6-12 months):
– New Senior Leadership team in place
– Critical Technical staff repopulated
– HR development systems introduced
– Brillion to positive FCF (Jun) & Net Income
– Gunite & Imperial turn-around in process
– Common & LEAN systems introduced
– ERP system selection
– Non-core assets divested or identified
– Plant consolidations underway
Grow (12-18 months):
– Acquired Camden
– 2x Alum wheel capacity
– Imperial business wins
– M&A growth opportunities
Transformation & Execution
2012 - A Year of Execution
15
Top Priorities - Q3 2012
Project Timeline
Q4
Q1
Q2
Q3
Q4
Q1
2011
2012
Ahead
of schedule
&
on budget
2013
Q4 2013 ---->
Aluminum Capacity Timeline
MC1 & MC2
Equipment
Arrival
Equipment
Arrival
Building
Renovation
Renovation
MC1 & MC2
Ramp-Up
Ramp-Up
MC1 & MC2
commercial
commercial
Machine Line
1 Equipment
Arrival
Arrival
Machine Line 1
capacity added
Machine Line
2 Equipment
Arrival
2 Equipment
Arrival
Machine
Line 1
Ramp-Up
Line 1
Ramp-Up
Machine Line 2
Ramp- Up
Machine Line 2
commercial
commercial
Acme
Polish
Installed
Polish
Installed
JAN
FEB
MAR
APR
MAY
JUN
AUG
SEP
OCT
NOV
JUL
17
MC3 & MC4
Equipment
Arrival
Equipment
Arrival
Dec
AHEAD OF SCHEDULE &
ON BUDGET
ON BUDGET
Gunite CAPEX Timeline
Slack Line
Installation
Installation
Slack Line
Full
Production
Full
Production
Drum Machine
Line 1
Equipment
Arrival
Line 1
Equipment
Arrival
Drum
Machine
Line 1 Full
Production
Machine
Line 1 Full
Production
Site
Preparation
Preparation
Drum Machine
Line 2
Line 2
Full Production
Drum Machine
Line 3
Equipment
Arrival
Line 3
Equipment
Arrival
Drum Machine
Line 3
Line 3
Full Production
18
Hub Machine
Line Equipment
Arrival
Line Equipment
Arrival
JAN
FEB
MAR
APR
MAY
JUN
AUG
SEP
OCT
NOV
JUL
Dec
ON TRACK & ON BUDGET
Elkhart
Closure
(Q1 2013)
Imperial Progress
19
Past Due Reductions
On Time Delivery
Imperial Improvements Underway
• Upgraded Business Unit and Plant Leadership
teams (TX, TN)
teams (TX, TN)
• Elimination of past due situation at customers
• Completion of TX-TN consolidation projects:
• Transferred presses safely, up and
running consistently
running consistently
• PPAP remaining parts at TX
• TN2 expansion and bumper consolidation
from TN1
from TN1
• TX polish plant expansion and new
process launch
process launch
• Reduce labor costs
• Fix ERP & scheduling systems in TX
• Addressing key commercial issues with customers
• $12 to $15 million in new business awards
20
Summary Income Statement
21
Summary Income Statement
22
Consolidated Results
Q2 Consolidated Revenue
Q2 Consolidated EBITDA
Consolidated Revenue Breakout
(2011 Full Year)
Business Segment
Customer
Market Segment
23
Wheels & Gunite Performance
Q2 Wheels Revenue
Q2 Wheels EBITDA (1)
(1) EBITDA before corporate allocations
Q2 Gunite Revenue
Q2 Gunite EBITDA (1)
(1) EBITDA before corporate allocations
24
Brillion & Imperial Segments
Q2 Brillion Revenue
Q2 Brillion EBITDA (1)
(1) EBITDA before corporate allocations
Q2 Imperial Revenue
Q2 Imperial EBITDA (1)
25
Trade Working Capital
Historical Working Capital Requirements
Q2 2012 Working Capital Breakout
Q2 2011 Working Capital Breakout
26
Free Cash Flow
27
Net Debt & Liquidity
28
29
Full Year Guidance
Class 8 260K to 270K
Class 5-7 165K to 175K
Trailer 230K to 250K
Net Sales $1,000 to $1,025
Adjusted EBITDA $95 to $100
EPS - Diluted $(0.12) to $(0.05)
CAPEX $70
Depreciation & Amortization $53
Cash Interest Expense $32
Excess Pension Contributions $12
Trade Working Capital Source of Cash $9
Free Cash Flow $(10) to $(5)
30
Summary
• “Fix & Grow” Strategy being executed
• Long-term market trends remain favorable
heading into 2013 and beyond despite
near-term softness
heading into 2013 and beyond despite
near-term softness
• Resources focused on key priorities:
• Aluminum Wheels ahead of schedule
• Gunite restructuring on track
• Imperial back under control
• Adequate liquidity and initiatives to
improve it
improve it
• Strategic opportunities exist to “Fix &
Grow” the company
Grow” the company
• We are executing our plan!
31
32
33
Segment Revenue
34
Segment Operating Income
35
Segment Adjusted EBITDA
36
Sales & Adjusted EBITDA
37
Net Income to EBITDA Reconciliation
38
Trade Working Capital
39
Customer Receivables - Net
40
Inventories - Net
41
Accounts Payable
42