OREANDA-NEWS. 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

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.

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.

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SOURCE Metaldyne Performance Group Inc.