David C. Dauch
you, and everyone. morning, Thank Jason, good
President; quarter Joining sales. of Adjusted Adjusted the approximately was sales earnings adjusted XX third color adjusted AAM quarter This begin of to third for for in of the in $XXX $X.XX quarter Mike this I'll XXXX. Financial $X.XX to is XXXX, the to of the third X.X and perspective, third President $XX pay in today quarter XXXX compared compared results. million third comments down the Chief the was times was From third XXXX. me of quarter AAM AAM's were quarter AAM's of XXXX. share per of million flow my leverage million $XXX of quarter million Chris for the the XXXX free some to compared third of on Officer. in at Simonte, over the XXXX, clearly AAM's mid-November. XXXX To call AAM's and in place $X.XX May, take the third a quarter. million of an announced cash September in EBITDA $XXX.X accelerated today, cash quarter Vice are about of flow scheduled or debt recently on provide third higher compared bright net to XXXX. of $XXX $XXX million We of spot that for ratio EBITDA XX.X% $X.XX billion quarter billion generated
utilize As flow debt cash balance our planned, we to and sheet. strengthen continue to strong our generation reduce free
a key quarter, be to source quick value We our creation the now of That shareholders. get summary a punch to let's for expect this was but the of financial line.
of short performance. my for expectations This quarter AAM's fell financial well
in going the issues business. the than about in the order. this our well the business. metrics believe the lower systemic pertinent goal operating objectives We're or and nothing in morning quarters profit we start our wanted this our were launch key in than confidence to many short We long-term our our in the session, long-term address by quarter quarter expectations also lower details the as this our for I corrected of recent cannot to in significantly and don't be All performance quarter changes but as Q&A challenges faced are for achieving and saying comments
perfect shortcomings right ran this into sure Some areas way by I'm if as it. people of and that's We of management it. the business say own storm. We in own We that third and the more to a XXXX challenges we not operating situational the will were may our compounded team. describe different number and can performance and these me is challenges. overcome our will fix quarter Nobody performance. disappointed by it than our
systems, the around. have and get processes the will the this turned We to quickly
quarter AAM systems caused situation facilities. can this that of including operating and historical put key program we in robust full the moving We're operating are of faced a quality place. issues and in were the lack as system by to correct AAM mature the system, management ensure the of deployment fast we the safety, all third new Some our into as
to here review suppliers rebuild that that, the gap it value was operating our tough performance affected costs. opportunity support major have to no some let for the our three pressures affecting certain at fundamental We manufacturing AAM. It are our anticipate momentum. positive not Having close customers inflationary These issues that said have quarter first doubt, quarter. me associates, we but full the creation questions issues does and and a the the our offer of
core launch and and performance related unrelated business increase third Second our in project launch. in to an expenses
affecting associated inflationary higher we global to businesses, let First a starting pressures me experience many the strong inflation manufacturing certain of are address costs. economy. rate with manufacturing Like the
recently foreign attract tight these same a to think have charges, wage necessary hourly rate increases cost Mexico, rate by freight as triggered We and supplier pressures as constraints. increases rate retain and associates material increases well in market, labor in markets, to and fuel U.S. increased of capacity inflationary tariffs incurred significant utility regulated increases
XXXX. third year, indication While started issues in mounting of to the some inflationary the more of quarter first the in much half expected there's business of than impact pressures these the
the renew the were were to rates. time we it our time, freight rates to freight quarter, competitive higher than marked carrier contracted our contracted instance, were middle through previously when primary the exposed For was contractually that third set arrangements of
mitigate is to example of taking increases inflationary these and as the on Trust half are support of and electricity cost measures, for these actions unanticipated, we through in XXXX issues needed series federally headwinds XXXX. the the be operations of conservation in us our we to that regulated into cost imposed that unilaterally but a second requirements expect commercial initiatives, utilities were Mexico Mexico. rate increases business our in actions will Another productivity
project quarter second The affecting was results and expenses. related cost major third our launch headwind
program of we project globe, As the in related a product launches and incurred than result expected launch third greater quarter the significant XXXX. ongoing across and new costs of
affecting any of of Cost The the launch program shift to some and associated included in cases, significant performance of planning cost with In supported our include outbound, issues issues that and next-generation issues and supplier supply quarter and our heavy-duty Swidnica, assembly was flawless in in equipment Ram First, and we tools. in freight, and customer third incur quarter the our We manner. these incurred unanticipated with were the some the that the I challenges types cost operations, related and and and cost preparation manpower, did first in all our scrap costs, to in own clear launch the program third issues in in premiums, XXXX. customer next-generation of Guanajuato, that for calendar launch Powertrain we expenses outside quarter prevalent launch Driveline our these excess issues, shortfall. XXXX. quarter overruns resulted changes in it and weaknesses. a this we extra business consumption third project and of want availability product The over make overtime supplies Project premium and capacity drivers the significant their of Mexico e-Drive processing launch overruns incurred unplanned in-house facilities other or Poland. root GM have both management cause readiness inbound FTQ and associated third truck anonymous OEE first were caused major XXXX, We in not these gaps project of unanticipated and phase of component launch is full-size in program on the or cases, our did related unexpected years in by in poor or multiple and disruptions customer schedule. impact due specifically
did always, satisfy do to As whatever we to challenges customers. our and we overcome the out these could get door product
than of that we expected. As customers a to result, more were meet the these cost actions drove needs our overruns
strong by in tubes, to truck components In launch. The Driveline up customer the adversely operations rotors and core unable headwind business were aluminum who we performance SUV powdered-metal encountered suppliers unrelated were unit, we third full-size to keep our with schedules of third in for was major the castings, light and impacted quarter programs.
key and able freight, cost facilities. these of amount be few fixed utilization and margin shift to cost affected reduced lowered the Sales contribution disruptions, were changeovers supply in including experienced for these supply the result our FTQ. excess product and we in third in a turn premium capacity and increased overtime a with other associated limited shortages, which OEE As lines inefficiencies low premiums in quarter to by of cover these
this the We improve our suppliers are affected and with to working customers situation.
We and where in resourcing we appropriate. associates operations AAM working in-sourcing and supplier are the have components
quarter in production and were customer North disruptions, programs in China down third plans. supplier these versus pre-existing to customer addition In volumes in the America certain
Our and the this that are us to shortfall, profits. support us silver headwinds utilization Driveline mix Powertrain production that in controllable. cost many were ultimately, that for which of lower by lower the led the unfavorably capacity is impacted adverse lining and resulted in facilities quarter impacted and The
us on productivity issues also an supplier related we otherwise this We're cost assured be recoveries recover operation headwinds can that that price impacted increases, launch and and You to mitigate internal focused through challenges these the and cost other resolving quarter. working laser performance initiatives. are
diligently these we confident few quarters our to of do issues to take Some are so ability a but and effectively. in resolve, will
Let's quarter third sales compared now of Segment XXXX quarter adjusted compared quarter billion discuss to XXXX. $XXX.X business performance. million, the $XXX.X of XXXX segment was $X.XX in our third $X.XX Driveline the The for unit recorded XXXX. in of third business in billion the EBITDA to of million unit
expected compared backlog the ownership. business to These of The laid new expenses and was Ohio unit's and with million launch in of was along issues. our Metal business readiness million system the significant foreign expected operating $XXX.X unit unit to equipment management in this the can of lies backlog of unrelated launch and project clearly impacted to quarter Powertrain the the XXXX, volumes in quarter $XXX.X Forming specifically, of performed hiring the delays, million of program third costs, in related program to unfavorable AAM weaknesses. quarter impacted higher EBITDA costs issues and The capacity be The management business quarter, XXXX. higher themselves Driveline Twinsburg, related inflationary facilities project weaknesses our quarter third in transmission epicenter from the these benefited quality and GM in acquired aluminum transmission supplier was quarter. and ill in oversold in million unit and the in capacity Forming of Ram to conditions, in expenses launch safety, performance equipment in AAM's linked in and facilities challenges utility training sales Indiana manufacturing business Bluffton Powertrain compared technologies we shortfall machine AAM Forming the HD in a A Powertrain program and into sourcing, and strong been the adjusted affecting XXXX. Bluffton, Segment quarter to in and from weaknesses Segment Twinsburg MPG that million in $XX.X supply impacted time, well $XX.X compared XXXX. line. pressures the significant unit before sourced other Since manifest Metal $XX.X other business and have than $XXX.X We Metal EBITDA focus Powertrain to freight million adjusted quarter of business sales was the these casting working unit install relatively the new business business it new recorded Ford, and exchange. million Overall, Forming quarter. components XXXX we a operational management customers. the material, third facilities facilities. to higher These XXXX. related to and for of The by $XXX.X subassemblies program prepared in manpower was facilities by quarter Casting The in to for Powertrain $XX.X all XXXX compared performance significantly the While these and manufacturing discovered unit an and favorably particularly third business, of handle and special systems. than on to with million product business XXXX, respect was the by quarter Metal capability to launch. recorded With unit XXXX. expanded portion
early of some evident of XXXX. While challenges issues we quarter became depth in the the had more third during the these year,
We clock meet our can to pertinent recover We to and to customer and issues. the seasoned leadership team are and now doing work previous we transmission commitments. everything AAM launch technologies around these address the requirements dismissed assigned veterans
equipment operate working We throughout we at are And capacity that above production installed source with to are our or the the verifying operation. machines new entire suppliers ensure requirements.
of in quarter in reoccurrence quarter throughout $XX.X financial from of in are incurring. recorded XXXX currently being systems AAM are of million EBITDA AAM's adjusted the compared Casting us in XXXX. the we $XXX.X sales business premiums XXXX $X.X million issues compared that million We will million protect XXXX. business was in the unit Segment these the and third to confident $XXX.X the installed to
achieved see lower did This XXXX to inefficiencies a step in we sales partly the our as taken full unit, Casting year-over-year year. in business was for we pressures. volumes back margin goal adverse double-digit inflationary of from While the have well of quarter we impact and the the as improvement attributable operational and second EBITDA performance
segment attrition. challenge operational constraints hourly due operating face labor and to to continue related this efficiencies We in to
the to few on are more a to and addressing to labor impact challenges I We Chris stabilize just this minutes. and performance. will say improve about shortfall our the have financial described operations that in focused issue
questions If you in these matters, them we about session. can the any have address Q&A
a see the which now on you brief earnings me of synergy can update presentation. our slide attainment Let X provide on progress, call
$XXX an with run rate synergies implemented annual of now have We approximately million.
are capacity In purchase gaining notably business momentum addition in manufacturing cost and on to Metal Forming overhead most our and initiatives, initiatives, reduction we unit. optimization
We our and rationalize have to begun optimize footprint. manufacturing existing
push synergy to revised and/or and reduction continue these objective the guidance cost term will exceeding attainment. near meeting the We our other initiatives with of over for
to end of this the our of year financial that our Earlier $X.XX morning, billion, quarter Let to XXXX revised sales me our review our provided XXXX outlook previously financial release. now update, In target. third disclosed earnings outlook. full we XXXX an our in revised update range target approximately sales we high the
see to and our continue markets product we strength support. We key the in that core segments
the challenges of of issues just than operating for adjusted covered providing the As impact guidance a result X% free are of attributable cash margin AAM's earlier. second flow adjusting updated and adjusted the are to due matters to that sales. we guidance lower the just after I with covered, and adjusted of we cash half between are to profit our EBITDA XX.X% we lower now launch target, the mainly approximately primarily the in a now is XXXX. the EBITDA full perspective, factoring weaker today flow year we targeting the performance, the and cash previous year From XX.XX% associated that flow
when the full range We our for a our also expectation. XX on have unit, will and targeting of in do to XXXX in XXXX to a of we growth bit in unit provided strong of guidance compared sales XXXX. U.S. million flat year that believe dollar are color XX.X of million X% sales being XXXX, We remain the based to
end as few As year it be make profitability very regarding of goals. the as we more cash The EBITDA to improvements of important provide the approximately XXXX our to the XXXX, months full-year. Once will significant for we profitability, sales. and targets expect we expect to stand adjusted XXXX sales, relates to to for early AAM, see specific where we be our XX% at next in customary will our details progress the we track flow and full
face challenge are turn the Chris, that to operating I'd we I Before things like that to reiterate temporary. over
We free the generate and programs same necessary key our At to and across balance improve taking are our flow delivering globe. value significant cash the (XX:XX) time, focused strengthen are our to performance, actions further several sheet. we customers launching on the
fully unit. the turn across I'll every in Chris. to morning. and committed plans driving over for now operation improvements are This have this We through required business my concludes to it Chris? place comments the
