- 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
INDIANAPOLIS,
April 25,
2024 /PRNewswire/ -- Allison Transmission
Holdings Inc. (NYSE: ALSN), today reported first quarter net
sales of $789 million and first
quarter diluted EPS of $1.90, which
includes a $0.13 impact from
$14 million of non-recurring UAW
contract signing incentives incurred in the quarter.
David S. Graziosi,
Chair and Chief Executive Officer of Allison Transmission
commented, "In the first quarter we generated record net sales,
driven by strong Global On-Highway demand and strength in our
Outside North America Off-Highway and Defense end markets. Robust
demand for Class 8 vocational and medium-duty trucks drove record
revenue in our North America On-Highway end market, while strength
in Asia drove record first quarter
revenue in our Outside North America On-Highway end market."
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 $750
million, extending the maturity date to 2029 and refinanced
$518 million of term loan debt,
paying down $101 million of existing
term loan debt and extending the maturity date to 2031. We also
maintained our commitment to returning capital to shareholders
through our share repurchase program, repurchasing nearly 1 percent
of outstanding shares. We also increased our quarterly dividend by
9 percent to $0.25 per share, the
fifth consecutive annual increase to our quarterly dividend."
First Quarter Financial Highlights
Net sales for the quarter were an all-time high
of $789 million. Year over year
results were led by:
- 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 in Asia and price increases on certain products,
partially offset by lower demand in Europe.
Net income for the quarter was $169 million. Diluted EPS for the quarter was
$1.90. Adjusted EBITDA, a non-GAAP
financial measure, for the quarter was $289
million. Net cash provided by operating activities for the
quarter was $173 million. Adjusted
free cash flow, a non-GAAP financial measure, for the quarter was
$162 million.
First Quarter Net Sales by End Market
End Market
|
Q1 2024
Net Sales ($M)
|
Q1 2023
Net Sales ($M)
|
Variance
|
North America On-Highway
|
$420
|
$376
|
$44
|
North America Off-Highway
|
$4
|
$24
|
($20)
|
Defense
|
$48
|
$27
|
$21
|
Outside North America
On-Highway
|
$115
|
$108
|
$7
|
Outside North America
Off-Highway
|
$42
|
$23
|
$19
|
Service Parts, Support Equipment &
Other
|
$160
|
$183
|
($23)
|
Total Net Sales
|
$789
|
$741
|
$48
|
First Quarter Financial Results
Gross profit for the quarter was $366 million, an increase of $5 million from $361
million for the same period in 2023. The increase in gross
profit was principally driven by increased net sales and price
increases on certain products, partially offset by higher
manufacturing expense, including $13
million of non-recurring UAW contract signing incentives,
and higher direct material costs.
Selling, general and administrative expenses for
the quarter were $86 million, a
decrease of $1 million from
$87 million for the same period in
2023. The decrease was principally driven by lower intangible
amortization expense and favorable product warranty expense
partially offset by higher commercial activities spending.
Engineering – research and development expenses
for the quarter were $46 million, an
increase of $2 million from
$44 million for the same period in
2023. The increase was principally driven by increased product
initiatives spending.
Net income for the quarter was $169 million, a decrease of $1 million from $170
million for the same period in 2023. The decrease was
principally driven by higher manufacturing expense, $14 million of non-recurring UAW contract signing
incentives, $10 million of unrealized
mark-to-market adjustments for marketable securities and higher
direct material costs partially offset by increased net sales,
price increases on certain products and lower income tax
expense.
Net cash provided by operating activities was
$173 million, a decrease of
$20 million from $193 million for the same period in 2023. The
decrease was principally driven by higher cash incentive
compensation payments and non-recurring UAW contract signing
incentive payments partially offset by higher gross profit and
lower operating working capital funding requirements.
First Quarter Non-GAAP Financial
Measures
Adjusted EBITDA for the quarter was $289 million, an increase of $13 million from $276
million for the same period in 2023. The increase in
Adjusted EBITDA was principally driven by increased net sales and
price increases on certain products, partially offset by higher
manufacturing expense and higher direct material costs.
Adjusted free cash flow for the quarter was
$162 million, a decrease of
$7 million from $169 million for the same period in 2023. The
decrease was driven by lower net cash provided by operating
activities partially offset by lower capital expenditures.
2024 Guidance Update
We are reaffirming our full year 2024 guidance
provided to the market on February
13. Allison expects 2024 Net Sales in the range of
$3,050 to $3,150 million, Net Income in the range of
$635 to $685
million, Adjusted EBITDA in the range of $1,070 to $1,130
million, Net Cash Provided by Operating Activities in the
range of $700 to $760 million, Capital Expenditures in the range
of $125 to $135 million, and Adjusted Free Cash Flow in the
range of $575 to $625 million.
Conference Call and Webcast
The company will host a conference call at 5:00
p.m. ET on Thursday, April 25, 2024
to discuss its first quarter 2024 results. The dial-in phone number
for the conference call is +1-877-425-9470 and the international
dial-in number is +1-201-389-0878. A live webcast of the conference
call will also be available online at
http://ir.allisontransmission.com.
For those unable to participate in the conference
call, a replay will be available from 9:00
p.m. ET on April 25 until
11:59 p.m. ET on May 9. The replay dial-in phone number is
+1-844-512-2921 and the international replay dial-in number is
+1-412-317-6671. The replay passcode is 13745491.
About Allison
Transmission
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,
Indiana, USA. With a presence in
more than 150 countries, Allison has regional headquarters
in the Netherlands,
China and Brazil,
manufacturing facilities in
the USA, Hungary and India, as well as global
engineering resources, including electrification engineering
centers in Indianapolis, Indiana, Auburn Hills,
Michigan and London in
the United Kingdom. Allison also has more than 1,600
independent distributor and dealer locations worldwide. For more
information,
visit allisontransmission.com.
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
North America to increase adoption
of fully automatic transmissions; the success of our research and
development efforts, the outcome of which is uncertain; U.S. and
foreign defense spending; risks associated with our international
operations, including acts of war and increased trade
protectionism; the discovery of defects in our products, resulting
in delays in new model launches, recall campaigns and/or increased
warranty costs and reduction in future sales or damage to our brand
and reputation; our ability to identify, consummate and effectively
integrate acquisitions and collaborations; and risks related to our
indebtedness.
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 the United States ("GAAP"). Such non-GAAP
financial measures are reconciled to their closest GAAP financial
measures at the end of this press release. Non-GAAP financial
measures should not be considered in isolation or as a substitute
for our reported results prepared in accordance with GAAP and, as
calculated, may not be comparable to other similarly titled
measures of other companies.
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
Allison Transmission, Inc.'s, the Company's wholly-owned
subsidiary, Second Amended and Restated Credit Agreement. Adjusted
EBITDA as a percent of net sales is calculated as Adjusted EBITDA
divided by net sales.
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
Jackie
Bolles
Executive Director, Treasury and
Investor
Relations
jacalyn.bolles@allisontransmission.com
(317)
242-7073
Claire
Gregory
Director, Global External
Communications
claire.gregory@allisontransmission.com
(317)
694-2065
|
Allison Transmission
Holdings, Inc.
|
|
Condensed Consolidated
Statements of Operations
|
|
(Unaudited, dollars in
millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
Three months
ended March 31,
|
|
|
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
789
|
|
$
741
|
|
|
Cost of
sales
|
|
423
|
|
380
|
|
|
Gross profit
|
|
366
|
|
361
|
|
|
Selling, general and
administrative
|
|
86
|
|
87
|
|
|
Engineering - research
and development
|
|
46
|
|
44
|
|
|
Operating
income
|
|
234
|
|
230
|
|
|
Interest expense,
net
|
|
(25)
|
|
(28)
|
|
|
Other (expense) income,
net
|
|
(5)
|
|
10
|
|
|
Income before income
taxes
|
|
204
|
|
212
|
|
|
Income tax
expense
|
|
(35)
|
|
(42)
|
|
|
Net income
|
|
$
169
|
|
$
170
|
|
|
Basic earnings per
share attributable to common stockholders
|
|
$
1.92
|
|
$
1.85
|
|
|
Diluted earnings per
share attributable to common stockholders
|
|
$
1.90
|
|
$
1.85
|
|
|
Allison Transmission
Holdings, Inc.
|
|
Condensed Consolidated
Balance Sheets
|
|
(Unaudited, dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
|
|
|
|
2024
|
|
2023
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
|
|
Cash
and Cash Equivalents
|
|
|
|
$
551
|
|
$
555
|
|
Accounts receivable, net
|
|
|
|
392
|
|
356
|
|
Inventories
|
|
|
|
|
289
|
|
276
|
|
Other current assets
|
|
|
|
68
|
|
63
|
|
Total Current
Assets
|
|
|
|
1,300
|
|
1,250
|
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
762
|
|
774
|
|
Intangible assets,
net
|
|
|
|
828
|
|
833
|
|
Goodwill
|
|
|
|
|
2,075
|
|
2,076
|
|
Other non-current
assets
|
|
|
|
91
|
|
92
|
|
TOTAL ASSETS
|
|
|
|
|
$
5,056
|
|
$
5,025
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
$
244
|
|
$
210
|
|
Product warranty liability
|
|
|
|
30
|
|
32
|
|
Current portion of long-term debt
|
|
|
5
|
|
6
|
|
Deferred revenue
|
|
|
|
42
|
|
41
|
|
Other current liabilities
|
|
|
|
197
|
|
212
|
|
Total Current
Liabilities
|
|
|
|
518
|
|
501
|
|
|
|
|
|
|
|
|
|
|
Product warranty
liability
|
|
|
|
28
|
|
27
|
|
Deferred
revenue
|
|
|
|
92
|
|
89
|
|
Long-term
debt
|
|
|
|
|
2,398
|
|
2,497
|
|
Deferred income
taxes
|
|
|
|
513
|
|
519
|
|
Other non-current
liabilities
|
|
|
|
165
|
|
159
|
|
TOTAL
LIABILITIES
|
|
|
|
3,714
|
|
3,792
|
|
|
|
|
|
|
|
|
|
|
TOTAL STOCKHOLDERS'
EQUITY
|
|
|
|
1,342
|
|
1,233
|
|
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY
|
|
|
$
5,056
|
|
$
5,025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allison Transmission
Holdings, Inc.
|
|
Condensed Consolidated
Statements of Cash Flows
|
|
(Unaudited, dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended March 31,
|
|
|
|
|
|
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
|
|
$
173
|
|
$
193
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used for
investing activities (a)
|
|
|
|
(12)
|
|
(22)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used for
financing activities
|
|
|
|
(164)
|
|
(59)
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash
|
|
|
|
(1)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase
in cash and cash equivalents
|
|
|
(4)
|
|
112
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at beginning of period
|
|
|
555
|
|
232
|
|
Cash and cash
equivalents at end of period
|
|
|
|
$
551
|
|
$
344
|
|
Supplemental
disclosures:
|
|
|
|
|
|
|
|
|
Interest paid
|
|
|
|
|
$
(29)
|
|
$
(29)
|
|
Income taxes paid
|
|
|
|
|
$
(4)
|
|
$
(2)
|
|
Interest received from interest rate swaps
|
|
|
$
3
|
|
$
2
|
|
|
|
|
|
|
|
|
|
|
|
(a) Additions of
long-lived assets
|
|
|
|
|
|
$
(11)
|
|
$
(24)
|
|
Allison Transmission
Holdings, Inc.
|
|
Reconciliation of GAAP
to Non-GAAP Financial Measures
|
|
(Unaudited, dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
|
|
2024
|
2023
|
|
Net income
(GAAP)
|
|
|
|
|
$
169
|
$
170
|
|
plus:
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
|
35
|
42
|
|
Depreciation of property, plant and equipment
|
|
|
27
|
26
|
|
Interest expense, net
|
|
|
|
25
|
28
|
|
UAW
Local 933 contract signing incentives (a)
|
|
|
14
|
-
|
|
Unrealized loss (gain) on marketable securities (b)
|
|
|
7
|
(3)
|
|
Stock-based compensation expense (c)
|
|
|
6
|
5
|
|
Amortization of intangible assets
|
|
|
|
5
|
11
|
|
Loss
associated with impairment of long-lived assets
|
|
|
1
|
-
|
|
Technology-related investments gain (d)
|
|
|
-
|
(3)
|
|
Adjusted EBITDA
(Non-GAAP)
|
|
|
|
$
289
|
$
276
|
|
Net sales
(GAAP)
|
|
|
|
|
$
789
|
$
741
|
|
Net income as a percent
of net sales (GAAP)
|
|
|
21.4 %
|
22.9 %
|
|
Adjusted EBITDA as a
percent of net sales (Non-GAAP)
|
|
|
36.6 %
|
37.2 %
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities (GAAP)
|
|
|
$
173
|
$
193
|
|
Deductions to Reconcile
to Adjusted Free Cash Flow:
|
|
|
|
|
|
Additions of long-lived assets
|
|
|
|
(11)
|
(24)
|
|
Adjusted free cash flow
(Non-GAAP)
|
|
|
|
$
162
|
$
169
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 International
Union, United Automobile, Aerospace and Agricultural Implement
Workers of America ("UAW") Local 933 represented employees
ratifying a four-year collective bargaining agreement effective
through November 2027.
|
|
(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.
|
|
(c)
|
Represents stock-based
compensation expense (recorded in Cost of sales, Selling, general
and administrative, and Engineering — research and
development).
|
|
(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.
|
Allison Transmission
Holdings, Inc.
|
Reconciliation of GAAP
to Non-GAAP Financial Measures for Full Year Guidance
|
(Unaudited, dollars in
millions)
|
|
|
|
|
|
|
|
|
|
Guidance
|
|
|
|
Year Ending December
31, 2024
|
|
|
|
Low
|
|
High
|
Net Income
(GAAP)
|
|
$
635
|
|
$
685
|
plus:
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
167
|
|
177
|
Depreciation of
property, plant and equipment
|
|
112
|
|
112
|
Interest expense,
net
|
|
98
|
|
98
|
Stock-based
compensation expense (a)
|
|
26
|
|
26
|
UAW Local 933 contract
signing incentives (b)
|
|
14
|
|
14
|
Amortization of
intangible assets
|
|
10
|
|
10
|
Unrealized loss on
marketable securities (c)
|
|
7
|
|
7
|
Loss associated with
impairment of long-lived assets
|
|
1
|
|
1
|
|
|
|
|
|
|
Adjusted EBITDA
(Non-GAAP)
|
|
|
$
1,070
|
|
$
1,130
|
|
|
|
|
|
|
Net Cash Provided by
Operating Activities (GAAP)
|
|
|
$
700
|
|
$
760
|
Deductions to Reconcile
to Adjusted Free Cash Flow:
|
|
|
|
|
|
Additions of long-lived assets
|
|
|
$
(125)
|
|
$
(135)
|
Adjusted Free Cash Flow
(Non-GAAP)
|
|
|
$
575
|
|
$
625
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Represents stock-based
compensation expense (recorded in Cost of sales, Selling, general
and administrative, and Engineering — research and
development).
|
(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 International
Union, United Automobile, Aerospace and Agricultural Implement
Workers of America ("UAW") Local 933 represented employees
ratifying a four-year collective bargaining agreement effective
through November 2027.
|
(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.
|
|
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/allison-transmission-announces-first-quarter-2024-results-302127940.html
SOURCE Allison Transmission Holdings Inc.