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MPG Reports 2016 First Quarter Results; Announces $0.55 Adjusted EPS and Re-affirms Guidance for 2016

May 5, 2016 6:01 AM EDT

SOUTHFIELD, Mich., May 5, 2016 /PRNewswire/ -- Metaldyne Performance Group Inc. (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 April 3, 2016.

First Quarter Financial Highlights:

  • Net sales of $739.5 million, compared to $765.2 million in Q1 2015
  • Gross profit was $136.5 million for the quarter, an increase of 6% from Q1 2015
  • Net income attributable to stockholders was $24.9 million resulting in Diluted EPS of $0.36
  • Adjusted Net Income Attributable to Stockholders of $38.0 million resulting in Adjusted EPS of $0.55
  • Adjusted EBITDA of $137.7 million, compared to $132.6 million in Q1 2015, representing a year-over-year increase of 4%
  • Adjusted EBITDA margin increased to 18.6% from 17.3% for the same quarter last year
  • Capital expenditures on an accrual basis were $45.0 million
  • Adjusted Free Cash Flow, defined as Adjusted EBITDA less capital expenditures on an accrual basis, was $92.7 million, an increase of $6.2 million from Q1 2015
  • Free Cash Flow, defined as net cash provided by operating activities less capital expenditures stated on the Company's condensed consolidated statement of cash flows, was $8.7 million

Recent Treasury Actions:

  • Our board of directors authorized a 3% increase in our quarterly dividend to $0.0925 per share, payable June 21, 2016 to stockholders of record on June 7, 2016.
  • On February 24, 2016 our board of directors authorized a $25 million share repurchase program. As of April 3, 2016 the cumulative shares repurchased totaled 191,645 shares at an average purchase price per share of $15.21

Commenting on the Company's results, George Thanopoulos, Chief Executive Officer of MPG, stated, "We are extremely pleased with our first quarter results. Expansion of our margins and continued strong EBITDA despite certain macro headwinds show the strength in our business. Our solid cash flow gave us flexibility to increase our dividend, start our share repurchase program and build cash on the balance sheet. We are continuing to win new business and focus on fast growing powertrain applications. We are looking forward to a successful year in 2016."

Business Outlook:

For fiscal year 2016, MPG maintains guidance as follows:

  • Net sales between $2.75 and $2.95 billion
  • Adjusted EBITDA between $500 and $540 million
  • Capital expenditures between $190 and $210 million
  • Adjusted Free Cash Flow between $310 and $330 million
  • Free Cash Flow ~$125 million
  • Income before tax between $131 and $171 million

Conference Call:  The Company will hold a conference call to discuss its first quarter 2016 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:

U.S. 

1-877-201-0168

International 

1-647-788-4901

Conference ID 

93963767

A live webcast and a replay of the conference call and the first quarter press release will also be available online at http://investors.mpgdriven.com.

For those unable to participate in the conference call, a replay will be available from 11:00 a.m. ET on May 5th, until 11:59 p.m. ET on May 12th. The replay dial-in phone number is:

U.S. 

1-855-859-2056

International 

1-404-537-3406

Passcode

93963767

About MPG:

MPG 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 Southfield, Michigan, MPG has a global footprint spanning 60 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:

This press release and any related statements contain 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," "projects," "believes," "seeks," "targets," "forecasts," "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 2016 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, among them being: 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; cyclicality and seasonality in the light vehicle, industrial and commercial vehicle markets; 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; the damage to or termination of our relationships with key third-party suppliers; 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; 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 incurrence of significant costs, liabilities, and obligations as a result of environmental requirements and other regulatory risks; extensive and growing governmental regulations; 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; 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.

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 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 EPS

We define Adjusted EPS as Adjusted Net Income Attributable to Stockholders, defined as net income attributable to stockholders before the after-tax impact of (i) gains and losses on foreign currency transactions, including the re-measurement of the Company's Euro denominated term loan (the "Euro Term Loan"), (ii) specific non-recurring items, and (iii) other adjustments, divided by the weighted average number of shares outstanding for the period on a diluted basis.

For a reconciliation of Adjusted EPS to diluted EPS, the most directly comparable measure determined under U.S. generally accepted accounting principles ("GAAP"), see "RECONCILIATION OF ADJUSTED EPS TO US GAAP DILUTED EPS".

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 income before tax, the most directly comparable measure determined under U.S. generally accepted accounting principles ("GAAP"), see "RECONCILIATION OF US GAAP INCOME BEFORE TAX 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 are on an accrual basis of accounting and can be calculated by taking the capital expenditures found in the investing section of our condensed consolidated statements of cash flows and adjusting for the change in the period of the capital expenditures in accounts payables found in the supplemental cash flow information on our condensed consolidated statements of cash flows. 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 income before tax, the most directly comparable GAAP measure, see "RECONCILIATION OF US GAAP INCOME BEFORE TAX TO ADJUSTED EBITDA AND ADJUSTED FREE CASH FLOW".

Free Cash Flow

We define Free Cash Flow as net cash provided by operating activities, as stated on the Company's condensed consolidated statement of cash flows, less capital expenditures, as stated on the Company's condensed consolidated statement of cash flows.

Contacts

Investor RelationsDavid GannVice President of Investor Relations and Communications[email protected]  248-727-1829

 

METALDYNE PERFORMANCE GROUP INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions except per share data)

April 3,

2016

December 31,

2015

Assets

Current assets:

Cash and cash equivalents

$

172.9

168.2

Receivables, net:

Trade

359.0

309.1

Other

34.2

35.4

Total receivables, net

393.2

344.5

Inventories

185.5

186.8

Prepaid expenses

16.1

15.0

Other assets

17.9

21.5

Total current assets

785.6

736.0

Property and equipment, net

798.5

786.0

Goodwill

907.7

907.7

Amortizable intangible assets, net

691.5

708.9

Deferred income taxes

4.3

1.7

Other assets

16.6

17.3

Total assets

$

3,204.2

3,157.6

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

$

254.0

248.9

Accrued compensation

45.0

55.2

Accrued liabilities

93.7

66.8

Short-term debt

0.5

0.7

Current maturities, long-term debt and capital lease obligations

13.5

14.5

Total current liabilities

406.7

386.1

Long-term debt, less current maturities

1,835.3

1,827.1

Capital lease obligations, less current maturities

22.6

22.5

Deferred income taxes

221.1

231.3

Other long-term liabilities

52.4

51.6

Total liabilities

2,538.1

2,518.6

Stockholders' equity:

Common Stock: par $0.001, 400.0 authorized, 68.0 and 67.9 shares issued and   outstanding, respectively

0.1

0.1

Common stock held in treasury, at cost: 0.2 and zero shares, respectively

(2.9)

Paid-in capital

860.2

856.2

Deficit

(144.2)

(162.9)

Accumulated other comprehensive loss

(50.1)

(57.3)

Total equity attributable to stockholders

663.1

636.1

Noncontrolling interest

3.0

2.9

Total stockholders' equity

666.1

639.0

Total liabilities and stockholders' equity

$

3,204.2

3,157.6

 

 

METALDYNE PERFORMANCE GROUP INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions except per share amounts)

Quarter Ended

April 3, 2016

March 29, 2015

Net sales

$

739.5

765.2

Cost of sales

603.0

636.7

Gross profit

136.5

128.5

Selling, general and administrative expenses

60.8

56.2

Operating income

75.7

72.3

Interest expense, net

26.5

27.6

Other, net

15.0

(5.2)

Other expense, net

41.5

22.4

Income before tax

34.2

49.9

Income tax expense

9.2

17.3

Net income

25.0

32.6

Income attributable to noncontrolling interest

0.1

0.2

Net income attributable to stockholders

$

24.9

32.4

Weighted average shares outstanding - Basic

68.0

67.1

Weighted average shares outstanding - Diluted

69.4

68.6

Cash dividends declared per share

$

0.09

0.09

Net income per share attributable to stockholders

Basic

0.37

0.48

Diluted

0.36

0.47

 

 

METALDYNE PERFORMANCE GROUP INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

Quarter Ended

April 3, 2016

March 29, 2015

Cash flows from operating activities:

Net income

$

25.0

32.6

Adjustments to reconcile net income to cash provided by operating activities:

Depreciation and amortization

55.2

56.4

Debt fee amortization

0.8

0.8

Loss on fixed asset dispositions

0.3

0.2

Deferred income taxes

(12.3)

(0.3)

Noncash interest expense

0.3

0.2

Stock-based compensation expense

3.7

3.3

Foreign currency adjustment

11.4

0.5

Other

0.1

0.1

Changes in assets and liabilities:

Receivables, net

(47.2)

(101.0)

Inventories

1.7

7.0

Accounts payable, accrued liabilities, and accrued compensation

19.1

60.7

Other, current

2.8

(7.6)

Other, non-current

(0.3)

(0.3)

Net cash provided by operating activities

60.6

52.6

Cash flow from investing activities:

Capital expenditures

(51.9)

(60.7)

Proceeds from sale of fixed assets

0.1

0.1

Capitalized patent costs

(0.1)

(0.1)

Net cash used for investing activities

(51.9)

(60.7)

Cash flows from financing activities:

Cash dividends

(0.1)

Proceeds from stock issuance

0.8

Purchases of treasury stock

(2.9)

Excess tax benefit on stock-based compensation

0.4

Cash settlement of equity awards

(0.9)

Payments on long-term debt

(3.3)

(10.2)

Other debt, net

(1.6)

(0.5)

Payment of offering related costs

(0.1)

Net cash used for financing activities

(7.6)

(10.8)

Effect of exchange rates on cash

3.6

(5.6)

Net increase (decrease) in cash and cash equivalents

$

4.7

(24.5)

Cash and cash equivalents:

Cash and cash equivalents, beginning of period

168.2

156.5

Net increase (decrease) in cash and cash equivalents

4.7

(24.5)

Cash and cash equivalents, end of period

$

172.9

132.0

Supplementary cash flow information:

Cash paid for income taxes, net

$

8.4

4.9

Cash paid for interest

13.8

16.0

Noncash transactions:

Capital expenditures in accounts payables

22.6

21.6

Dividends declared, not yet paid

6.1

6.1

Dividends declared on restricted stock awards, not yet vested

0.3

 

 

METALDYNE PERFORMANCE GROUP INC.

RECONCILIATION OF ADJUSTED EPS

TO US GAAP DILUTED EPS

(In millions except per share amounts)

Quarter Ended

April 3, 2016

March 29, 2015

Net income attributable to stockholders

$

24.9

32.4

Weighted average shares outstanding - Diluted

69.4

68.6

Net income per share attributable to stockholders - Diluted

$

0.36

0.47

Adjustments to Arrive at Adjusted Net Income Attributable to Stockholders

Loss (gain) on re-measurement of Euro Term Loan

$

11.0

Loss (gain) on foreign currency transactions - other

3.3

(5.0)

Non-recurring acquisition related items

1.3

(0.3)

Non-recurring operational items (1)

2.2

0.4

Tax impact of adjustments to net income attributable to stockholders

(4.7)

1.5

Adjusted Net Income Attributable to Stockholders

$

38.0

29.0

Weighted average shares outstanding - Diluted

69.4

68.6

Adjusted EPS

$

0.55

0.42

(1) Non-recurring operational items include charges for disposed operations and other.

 

 

 

RECONCILIATION OF US GAAP INCOME BEFORE TAX TO ADJUSTED

EBITDA AND ADJUSTED FREE CASH FLOW

(In millions)

Quarter Ended

April 3, 2016

March 29, 2015

Income before tax

$

34.2

49.9

Addbacks to Arrive at Unadjusted EBITDA

Interest expense, net

26.5

27.6

Depreciation and amortization

55.2

56.4

Unadjusted EBITDA

$

115.9

133.9

Adjustments to Arrive at Adjusted EBITDA

Loss (gain) on foreign currency

14.3

(5.0)

Loss on fixed assets

0.3

0.2

Debt transaction expenses

0.1

Stock-based compensation expense

3.7

3.3

Non-recurring acquisition related items

1.3

(0.3)

Non-recurring operational items (1)

2.2

0.4

Adjusted EBITDA

$

137.7

132.6

Capital expenditures

45.0

46.1

Adjusted Free Cash Flow

$

92.7

86.5

(1) Non-recurring operational items include charges for disposed operations and other.

 

 

METALDYNE PERFORMANCE GROUP INC.

RECONCILIATION OF 2016 GUIDANCE

INCOME BEFORE TAX TO ADJUSTED EBITDA AND ADJUSTED FREE CASH FLOW

(In millions)

2016 Guidance

2016 Guidance

Low End of Range

High End of Range

Income before tax

$

131.2

171.2

Addbacks to Arrive at Unadjusted EBITDA

Interest expense, net

104.4

104.4

Depreciation and amortization

238.4

238.4

Unadjusted EBITDA

474.0

514.0

Adjustments to Arrive at Adjusted EBITDA

Stock-based compensation expense

22.9

22.9

Non-recurring operational items (1)

3.1

3.1

Adjusted EBITDA

$

500.0

540.0

Capital expenditures

(190.0)

(210.0)

Adjusted Free Cash Flow

$

310.0

330.0

(1) Non-recurring operational items include charges for disposed operations and other.

 

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/mpg-reports-2016-first-quarter-results-announces-055-adjusted-eps-and-re-affirms-guidance-for-2016-300263355.html

SOURCE Metaldyne Performance Group Inc.



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