Allison Transmission Announces First Quarter 2024 Results
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Record net sales of
$789 million -
Diluted EPS of
$1.90 , which includes$0.13 impact from$14 Million of Non-Recurring UAW Contract Signing Incentives incurred in the quarter -
Refinanced Revolving Credit Facility and Term Loan, Paying Down
$101 Million of Outstanding Debt
Graziosi continued, "During the first quarter, in support of our long-standing commitment to prudent balance sheet management and our focus on a low-cost, flexible and pre-payable debt structure with long-dated maturities, we increased commitments under our revolving credit facility to
First Quarter Financial Highlights
Net sales for the quarter were an all-time high of
- A
$44 million increase in net sales in the North America On-Highway end market, leading to record net sales of$420 million , principally driven by strength in demand for Class 8 vocational and medium-duty trucks and price increases on certain products, - A
$21 million increase in net sales in the Defense end market principally driven by increased demand for Tracked vehicle applications, - A
$19 million increase in net sales in the Outside North America Off-Highway end market principally driven by strength in demand from the energy, mining and construction sectors, and - A
$7 million increase in net sales in the Outside North America On-Highway end market, leading to record first quarter net sales of$115 million , principally driven by higher demand inAsia and price increases on certain products, partially offset by lower demand inEurope .
Net income for the quarter was
First Quarter
End Market |
Q1 2024
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Q1 2023
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Variance |
North America On-Highway |
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North America Off-Highway |
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( |
Defense |
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Outside North America On-Highway |
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Outside North America Off-Highway |
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Service Parts, Support Equipment & Other |
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( |
Total |
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First Quarter Financial Results
Gross profit for the quarter was
Selling, general and administrative expenses for the quarter were
Engineering – research and development expenses for the quarter were
Net income for the quarter was
Net cash provided by operating activities was
First Quarter Non-GAAP Financial Measures
Adjusted EBITDA for the quarter was
Adjusted free cash flow for the quarter was
2024 Guidance Update
We are reaffirming our full year 2024 guidance provided to the market on
Conference Call and Webcast
The company will host a conference call at
For those unable to participate in the conference call, a replay will be available from
About
Allison Transmission (NYSE: ALSN) is a leading designer and manufacturer of propulsion solutions for commercial and defense vehicles and the largest global manufacturer of medium- and heavy-duty fully automatic transmissions that
Improve the Way the World Works
. Allison products are used in a wide variety of applications, including on-highway trucks (distribution, refuse, construction, fire and emergency), buses (school, transit and coach), motorhomes, off-highway vehicles and equipment (energy, mining and construction applications) and defense vehicles (tactical wheeled and tracked). Founded in 1915, the company is headquartered in Indianapolis,
Forward-Looking Statements
This press release contains forward-looking statements. The words "believe," "expect," "anticipate," "intend," "estimate" and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. You should not place undue reliance on these forward-looking statements. Although forward-looking statements reflect management's good faith beliefs, reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements speak only as of the date the statements are made. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to: our participation in markets that are competitive; our ability to prepare for, respond to and successfully achieve our objectives relating to technological and market developments, competitive threats and changing customer needs, including with respect to electric hybrid and fully electric commercial vehicles; increases in cost, disruption of supply or shortage of labor, freight, raw materials, energy or components used to manufacture or transport our products or those of our customers or suppliers, including as a result of geopolitical risks, wars and pandemics; global economic volatility; general economic and industry conditions, including the risk of recession; labor strikes, work stoppages or similar labor disputes, which could significantly disrupt our operations or those of our principal customers or suppliers; the highly cyclical industries in which certain of our end users operate; uncertainty in the global regulatory and business environments in which we operate; the concentration of our net sales in our top five customers and the loss of any one of these; the failure of markets outside
Use of Non-GAAP Financial Measures
This press release contains information about Allison's financial results and forward-looking estimates of financial results which are not presented in accordance with accounting principles generally accepted in
We use Adjusted EBITDA and Adjusted EBITDA as a percent of net sales to measure our operating profitability. We believe that Adjusted EBITDA and Adjusted EBITDA as a percent of net sales provide management, investors and creditors with useful measures of the operational results of our business and increase the period-to-period comparability of our operating profitability and comparability with other companies. Adjusted EBITDA as a percent of net sales is also used in the calculation of management's incentive compensation program. The most directly comparable GAAP measure to Adjusted EBITDA is Net income. The most directly comparable GAAP measure to Adjusted EBITDA as a percent of net sales is Net Income as a percent of net sales. Adjusted EBITDA is calculated as the earnings before interest expense, net, income tax expense, amortization of intangible assets, depreciation of property, plant and equipment and other adjustments as defined by
We use Adjusted Free Cash Flow to evaluate the amount of cash generated by our business that, after the capital investment needed to maintain and grow our business and certain mandatory debt service requirements, can be used for the repayment of debt, stockholder distributions and strategic opportunities, including investing in our business. We believe that Adjusted Free Cash Flow enhances the understanding of the cash flows of our business for management, investors and creditors. Adjusted Free Cash Flow is also used in the calculation of management's incentive compensation program. The most directly comparable GAAP measure to Adjusted Free Cash Flow is Net cash provided by operating activities. Adjusted Free Cash Flow is calculated as Net cash provided by operating activities, after additions of long-lived assets.
Attachments
- Condensed Consolidated Statements of Operations
- Condensed Consolidated Balance Sheets
- Condensed Consolidated Statements of Cash Flows
- Reconciliation of GAAP to Non-GAAP Financial Measures
- Reconciliation of GAAP to Non-GAAP Financial Measures for Full Year Guidance
Contacts
Executive Director,
jacalyn.bolles@allisontransmission.com
(317) 242-7073
Director,
claire.gregory@allisontransmission.com
(317) 694-2065
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Condensed Consolidated Statements of Operations |
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(Unaudited, dollars in millions, except per share data) |
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Three months ended |
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2024 |
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2023 |
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Net sales |
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$ 789 |
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$ 741 |
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Cost of sales |
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423 |
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380 |
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Gross profit |
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366 |
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361 |
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Selling, general and administrative |
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86 |
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87 |
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Engineering - research and development |
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46 |
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44 |
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Operating income |
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234 |
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230 |
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Interest expense, net |
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(25) |
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(28) |
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Other (expense) income, net |
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(5) |
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10 |
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Income before income taxes |
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204 |
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212 |
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Income tax expense |
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(35) |
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(42) |
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Net income |
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$ 169 |
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$ 170 |
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Basic earnings per share attributable to common stockholders |
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$ 1.92 |
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$ 1.85 |
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Diluted earnings per share attributable to common stockholders |
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$ 1.90 |
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$ 1.85 |
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Condensed Consolidated Balance Sheets |
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(Unaudited, dollars in millions) |
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March 31, |
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December 31, |
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2024 |
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2023 |
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ASSETS |
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Current Assets |
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Cash and Cash Equivalents |
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$ 551 |
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$ 555 |
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Accounts receivable, net |
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392 |
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356 |
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Inventories |
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289 |
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276 |
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Other current assets |
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68 |
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63 |
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Total Current Assets |
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1,300 |
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1,250 |
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Property, plant and equipment, net |
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762 |
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774 |
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Intangible assets, net |
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828 |
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833 |
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2,075 |
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2,076 |
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Other non-current assets |
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91 |
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92 |
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TOTAL ASSETS |
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$ 5,056 |
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$ 5,025 |
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LIABILITIES |
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Current Liabilities |
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Accounts payable |
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$ 244 |
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$ 210 |
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Product warranty liability |
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30 |
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32 |
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Current portion of long-term debt |
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5 |
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6 |
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Deferred revenue |
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42 |
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41 |
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Other current liabilities |
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197 |
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212 |
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Total Current Liabilities |
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518 |
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501 |
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Product warranty liability |
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28 |
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27 |
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Deferred revenue |
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92 |
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89 |
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Long-term debt |
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2,398 |
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2,497 |
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Deferred income taxes |
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513 |
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519 |
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Other non-current liabilities |
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165 |
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159 |
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TOTAL LIABILITIES |
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3,714 |
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3,792 |
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TOTAL STOCKHOLDERS' EQUITY |
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1,342 |
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1,233 |
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TOTAL LIABILITIES & STOCKHOLDERS' EQUITY |
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$ 5,056 |
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$ 5,025 |
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Condensed Consolidated Statements of Cash Flows |
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(Unaudited, dollars in millions) |
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Three months ended |
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2024 |
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2023 |
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Net cash provided by operating activities |
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$ 173 |
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$ 193 |
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Net cash used for investing activities (a) |
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(12) |
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(22) |
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Net cash used for financing activities |
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(164) |
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(59) |
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Effect of exchange rate changes on cash |
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(1) |
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- |
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Net (decrease) increase in cash and cash equivalents |
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(4) |
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112 |
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Cash and cash equivalents at beginning of period |
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555 |
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232 |
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Cash and cash equivalents at end of period |
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$ 551 |
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$ 344 |
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Supplemental disclosures: |
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Interest paid |
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$ (29) |
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$ (29) |
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Income taxes paid |
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$ (4) |
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$ (2) |
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Interest received from interest rate swaps |
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$ 3 |
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$ 2 |
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(a) Additions of long-lived assets |
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$ (11) |
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$ (24) |
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Reconciliation of GAAP to Non-GAAP Financial Measures |
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(Unaudited, dollars in millions) |
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Three months ended |
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March 31, |
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2024 |
2023 |
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Net income (GAAP) |
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$ 169 |
$ 170 |
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plus: |
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Income tax expense |
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35 |
42 |
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Depreciation of property, plant and equipment |
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27 |
26 |
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Interest expense, net |
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25 |
28 |
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14 |
- |
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Unrealized loss (gain) on marketable securities (b) |
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7 |
(3) |
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Stock-based compensation expense (c) |
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6 |
5 |
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Amortization of intangible assets |
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5 |
11 |
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Loss associated with impairment of long-lived assets |
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1 |
- |
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Technology-related investments gain (d) |
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- |
(3) |
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Adjusted EBITDA (Non-GAAP) |
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$ 289 |
$ 276 |
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Net sales (GAAP) |
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$ 789 |
$ 741 |
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Net income as a percent of net sales (GAAP) |
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21.4 % |
22.9 % |
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Adjusted EBITDA as a percent of net sales (Non-GAAP) |
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36.6 % |
37.2 % |
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Net cash provided by operating activities (GAAP) |
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$ 173 |
$ 193 |
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Deductions to Reconcile to Adjusted Free Cash Flow: |
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Additions of long-lived assets |
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(11) |
(24) |
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Adjusted free cash flow (Non-GAAP) |
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$ 162 |
$ 169 |
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(a) |
Represents non-recurring incentives (recorded in Cost of sales, Selling, general and administrative, and Engineering — research and development) to eligible employees as a result of |
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(b) |
Represents a loss (gain) (recorded in Other (expense) income, net) related to an investment in the common stock of Jing-Jin Electric Technologies Co. Ltd. |
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(c) |
Represents stock-based compensation expense (recorded in Cost of sales, Selling, general and administrative, and Engineering — research and development). |
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(d) |
Represents a gain (recorded in Other (expense) income, net) related to investments in co-development agreements to expand our position in propulsion solution technologies. |
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Reconciliation of GAAP to Non-GAAP Financial Measures for Full Year Guidance |
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(Unaudited, dollars in millions) |
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Guidance |
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Year Ending |
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Low |
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High |
Net Income (GAAP) |
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$ 635 |
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$ 685 |
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plus: |
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Income tax expense |
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167 |
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177 |
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Depreciation of property, plant and equipment |
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112 |
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112 |
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Interest expense, net |
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98 |
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98 |
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Stock-based compensation expense (a) |
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26 |
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26 |
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14 |
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14 |
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Amortization of intangible assets |
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10 |
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10 |
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Unrealized loss on marketable securities (c) |
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7 |
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7 |
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Loss associated with impairment of long-lived assets |
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1 |
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1 |
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Adjusted EBITDA (Non-GAAP) |
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$ 1,070 |
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$ 1,130 |
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Net Cash Provided by Operating Activities (GAAP) |
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$ 700 |
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$ 760 |
Deductions to Reconcile to Adjusted Free Cash Flow: |
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Additions of long-lived assets |
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$ (125) |
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$ (135) |
Adjusted Free Cash Flow (Non-GAAP) |
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$ 575 |
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$ 625 |
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(a) |
Represents stock-based compensation expense (recorded in Cost of sales, Selling, general and administrative, and Engineering — research and development). |
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(b) |
Represents non-recurring incentives (recorded in Cost of sales, Selling, general and administrative, and Engineering — research and development) to eligible employees as a result of |
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(c) |
Represents a loss (recorded in Other (expense) income, net) related to an investment in the common stock of Jing-Jin Electric Technologies Co. Ltd. |
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