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• Q1 2024 Sales: $1.61 billion

• Adjusted Earnings Per Share (EPS): $0.18

• Adjusted Free Cash Flow: Use of $21 million

• Adjusted EBITDA: $206 million, representing 12.8% of sales

• Gross Profit: $198.5 million

• Net Income: $20.5 million, or $0.17 per share

• Full-Year Sales Guidance: $6.05 billion to $6.35 billion

• Full-Year Adjusted EBITDA Guidance: $685 million to $750 million

• Full-Year Adjusted Free Cash Flow Guidance: $200 million to $240 million

• Warning! GuruFocus has detected 5 Warning Signs with AXL.

Release Date: May 03, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• American Axle & Mfg Holdings Inc (NYSE:AXL) reported a strong first quarter with sales increasing to $1.61 billion from $1.49 billion in the previous year.

• Adjusted EBITDA for the quarter was $206 million, demonstrating a significant improvement in profitability due to production stability and volume increases.

• The company announced new contracts with multiple luxury European OEMs to supply electric vehicle components, indicating growth in the electric vehicle sector.

• American Axle & Mfg Holdings Inc (NYSE:AXL) has achieved ISO 50001 certification at all manufacturing facilities and exceeded its US renewable and carbon-free energy goals, highlighting its commitment to sustainability.

• The company has a robust liquidity position with approximately $1.4 billion available, consisting of cash and borrowing capacity, which supports its financial stability and future growth initiatives.

Negative Points

• American Axle & Mfg Holdings Inc (NYSE:AXL) reported an adjusted free cash flow use of $21 million, indicating cash burn during the quarter.

• Despite improvements, certain operational challenges persist, particularly in the metal forming operations, requiring ongoing attention and resources.

• The company faces increased income tax expenses, driven by higher profitability and valuation allowances related to interest expense deductions in the US.

• R&D expenses are expected to remain high, averaging around $35 million to $40 million per quarter, as the company continues to develop its electrification platform.

• The company's net leverage ratio stands at 3.2 times, reflecting a significant level of debt relative to EBITDA, which could pose financial risks if not managed effectively.

Q & A Highlights

Q: What was the midpoint of your guidance for GM's full-size truck platform in terms of units? A: Christopher May, CFO, stated that the midpoint of their guidance remains consistent at approximately 1.4 million units for the GM full-size truck platform.