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Allison Transmission 2Q15 results

Published by
World Coal,


Allison Transmission Holdings Inc. reports net sales for 2Q15 of US$511 million – a 5% decrease from the same period in 2014. The company has attributed the decrease in net sales to mainly a result of lower demand in the global Off-Highway and Defense end markets.

Lawrence E. Dewey, Chairman, President and CEO of Allison Transmission commented: "Our 2Q15 results are within the full year guidance ranges we provided to the market on 27 April. Net sales in the North America On-Highway end market improved on a y/y basis for the eighth consecutive quarter. During the second quarter, Allison experienced the unfavourable impact of lower energy and commodity prices in the global Off-Highway and Service Parts, Support Equipment & Other end markets. Given that these end markets continue to exhibit an elevated level of uncertainty and a dearth of near-term visibility, we are updating our full year net sales guidance to a decrease in the range of 6 to 8% y/y. Allison continued its prudent and well-defined approach to capital allocation during the second quarter by settling US$79 million of share repurchases, paying a dividend of US$0.15 per share, repaying US$54 million of debt and completing a refinancing of the Senior Notes due 2019."

Non-GAAP financial measures 2Q15

Adjusted Net Income for 2Q15 was US$98 million, compared to Adjusted Net Income of US$117 million for the same period in 2014, decreasing US$19 million. Adjusted EBITDA for the quarter was US$186 million, or 36.3% of net sales, compared to US$186 million (34.7%) of net sales for the same period in 2014. Adjusted Free Cash Flow for 2Q15 was US$140 million, or US$0.78 per diluted share, compared to US$135 million for the same period in 2014, or US$0.74 per diluted share.

Net sales and gross profit

North America Off-Highway end market net sales declined 57% from the same period in 2014 and down 55% on a sequential basis principally driven. This is reported to be a result of lower demand from hydraulic fracturing applications.

Due to lower demand in energy and mining sectors, outside North America Off-Highway end market net sales were down 67 percent from the same period in 2014 and down 50% sequentially.

Service Parts, Support Equipment & Other end market net sales were down 12% from the same period in 2014 and down 4% on a sequential basis principally. This is reported to be due to lower demand for North America service parts.

Gross profit for 2Q15 was US$236 million – a decrease of 1% from US$239 million for the same period in 2014. Gross margin for the quarter was 46.2%, increasing 170 basis points from a gross margin of 44.5% for the same period in 2014. The decrease in gross profit from the same period in 2014 was reported to a result of decreased sales volume partially offset by price increases on certain products, favourable material costs and lower incentive compensation expense.

Edited from press release by Harleigh Hobbs

Read the article online at: https://www.worldcoal.com/coal/28072015/allison-transmission-2q15-results-2639/


 

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