AXL - Earnings call transcript Q1 2019 | American Axle & Manufacturing Holdings, Inc.

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Operator

Good morning. My name is Alison and I will be your conference facilitator today. At this time, I would like to welcome everyone to the American Axle & Manufacturing First Quarter 2019 Earnings Conference Call. All the lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. reminder, is a recorded. As Instructions] today's being call [Operator call to Mr. I like the over would now turn to Jason Parsons, Director of Investor Relations. Please go ahead, Mr. Parsons.

Jason Parsons

and is the XXXX earnings Alison, welcome we released Call. you, good quarter would morning, I Thank of first like Earlier everyone this who first joining AAM's on announcement. our us quarter earnings morning. to

can this announcement services. of and www.aam.com, website, PR access on Newswire page You through our the Investor the Relations

of dial call You website can of slides supplemental To at the today XX:XX to as replay our also number X:XX page listen of this well. through beginning This p.m. on this Investor conference be call, X-XXX-XXX-XXXX. find a Time, XXXXXXXX. Eastern available XX. p.m. will replay you Reservation can May

I matters which like future that risks contain differ discussed. would results call may and everyone remind predicted from of discussed those and operations may be and cannot this or begin, forward-looking subject the comments to quantified, uncertainties, cause Before statements to and materially in we activities to which

these a information, that non-GAAP information certain Securities this measures, to you the our with Also, filings Commission. available Information Exchange is well these our GAAP and we ask additional measures. regarding financial on will as refer call, we non-GAAP reconciliation refer to of to For financial non-GAAP measures during website.

in Transportation June the Over June months, Conference X & expect May the on JP conferences, following Morgan in Loan KeyBanc Barclays' the Conference XXXX and of European Markets' High participate and Syndicated on couple Automotive Conference next to Yield XX. XX, Capital Industrial, we Automotive the Bond

free With contact our to AAM's me host things that, me and over Dauch. facilities. always to are Please in investors we visits. David happy any CEO, addition, Chairman turn to let schedule of to feel In

David Dauch

results good morning you quarter the discuss today us to and for AAM's Thank XXXX. Thank everyone. joining for to financial first Jason you, of

our President Vice President; review Simonte, the today, AAM's Chris To begin my performance. first Officer. XXXX today comments and are May, and financial on call highlights Chief Mike quarter me I'll of AAM's Financial Joining the

and comment Next, critical and I'll units, AAM's status of our business improvement on the the plans on our performance launches. performance progress

Lastly, I'll will After may financial to for up you cover the over covers turning Chris. our Chris before of any financial results, questions things the details XXXX open have. our outlook we call that

Our program changeovers our two first America, downtime China. year-over-year to programs key vehicle North and of quarter largest our and financial reflects performance volumes production Europe, due customer light in lower markets for

launch of SUV AAM of quarter of and were $XXX program the The in reflect EBITDA was AAM's billion engine The experienced including these first duty by of certain impact XXXX production impact heavy and also changeovers. half of to the This $XXX first partially of the in heavy XXXX component first Ram in first is the GM $X.X decrease We the XXXX launch quarter of we quarter decreases per were quarter $X.XX $X.XX of quarter to results backlog. in million program the or of in XX.X% were to adjusted XXXX. first EPS transmission billion sales. AAM's on of share Ram the for second XXXX our in Our realization curves ramp share compared per business adjusted new compared lower the global to the $X.X operational performance the of was XXXX. sales. of downtime year-over-year of the XX.X% compared or and our offset launches. million our in truck impacted volumes, the X X efficiencies improvements duty than the and that XXXX. expected at sequential sales by reflect slower for quarter our customer first basis revenues customer related also plants

a a on information basis our and regarding by results profitability the details launch provide in sales will of minutes. impacted year-over-year financial additional higher and costs. lower few was Chris manufacturing Our

improvement now note business update of we I year details Driveline either on business units thing to me reorganization performance business that business from progress and provide from reduced to units. One Let announced an the update Metal our the plan. before at our four including unit get beginning results into financial quickly is the Forming to three Powertrain facilities reallocated our our on the segment that our or a

reported As our for recast business and a data. financials units provide financials XXXX comparable in have the have three to XXXX result, our we remaining segment

performance sales, recorded due higher costs unit manufacturing structure of EBITDA from sales business to adjusted show of into pressures the dive launch $XXX.X on it to higher our profit business generated consistency let's said, ensure of and in such tariffs. first material of the unit our lower of As to the costs $X.X largest Driveline price With to update period all margins progress due our relates items Year-over-year X period. quarter that unit. on to to and XXXX improvement were continue we plan, being down billion as business The inflationary our legacy million. Driveline disclosures and

changeover You major additional Ram heavy and the between model the the Ram heavy XXXX third one to caused XXXX quarter that beginning was model. issue remember incur that duty old duty premium us in new a XXXX

launch at our incurring the January associated with to and costs in last XXXX. changeover for only complete Ram now end complete We're but to pickup in duty longer heavy experiencing this they're program. at next the generation the building [ph] call, FCA downtime that required properly normally are executed project have a As us plant We're such XXXX. and trucks changeover launch here their typical expense we premium XXXX. major related was to launch this significant of Salteo only in mentioned no took we

the have this not in rate the However, the has are at rate at full we time. full XXXX we we to HD the running program would than been for run and point Ram Ramp curve that longer expected still expected

to versus expectations. the very a this this We our some but near resolve ramp initial FCA slower had in has our issue XXXX expect impact on term, sales

updates, on next further I'd on meeting performance to improvement full-size this reaffirm we both loss take time to performance move our customer. track the to are high generation, launches we of and expectations Before SUV ourselves truck are GM and that our like and

GM We launches had have well to worked extremely been and date. with and these flawless anonymous

laser-focus currently are upcoming We on heavy-duty launch. the

have us. nearly the side of impacting the issues previously business, the that On we resolved supplier all

units We that on to for in supplier in order have work current we continue to requirements. excessive an to premium our open relates on-time e-Drive meet to issue casting quality to and issue meet is cause continuing This order customer's aluminum requirements. costs our one delivery that our

of we While we XXXX. make into continue progress, to that the second tissue quarter carrying see

manufacturing reorganization part quarter issue I'd related soon. poor lingered behind in discuss This we that to legacy January, unit. XXXX has the While facility Bluffton business customer the the [ph] was that for launch Final third expected longer is we get meeting to, Driveline we out part two our us of are of requirements is Driveline now performance. and business in item MPG this one like than of issue completely this as we'll specifically to that the the the called of plants

this lower we premium and quarter facility. premium class of and labor first efficiency freight, saw scrap XXXX, The at experienced increased

seen by still While running are potential, we at XXXX track we end of and on meaningful quarter improve of have its full the the to this improvement not Bluffton further performance. is second

EBITDA $XX.X Forming of sales million of in million Metal and EBITDA quarter XXXX continue margins. the performance, first $XXX.X On Metal business unit, segment strong running of adjusted XX.X% their operating adjusted which Forming at recorded the

part of The segment target of of to $XXX.X Casting facility also of the basis As stabilized XX% XXXX million; XXXX. by business, the meet of increase goals the represents sales and reorganization for unit fourth first the operation has points sequential X.X% performance unit a to and EBITDA in its the at of second responsibility quarter million margin XXX this Twinsburg these manufacturing in $XX.X of performance over on business end the quarter recorded has from Metal Forming quarter. the business adjusted assumed is the improvement which

we U.S. issues first labor quarter the we of actions our benefits the XXXX taken our address shortage efforts that have and The in boundaries. realized of to

front our a still efficiencies, as operations, labor of our Last improved performance. plants well scrap year this have down stabilized We're this were has suffering do operational from costs lowered is as nearly left shortage. result, labor facility U.S. work our them. our that's premium now improved in one we to As and of all to some

pressures. Casting industrial to customers also the for and commercial business impact higher cost finance unit and certain pricing increase our improved to of performance offset inflationary We

work we'll We restored double improved EBITDA performance throughout in to and successfully year. unit this the have business towards continued margins digits

Chris, XXXX let to financial on over full-year quick Before outlook. provide I it comments turn me AAM's some

unchanged. remain previously Our targets stated full-year XXXX

However, for certain curves result currently of the expected volumes customer and programs, than slower end towards production of we're our we as low project trending a that range. than launch anticipated lower

through sales AAM $X.X off full-year continues our is billion between to billion of first the flow 'XX year As busy X another things in adjusted billion AAM to we several important million. for is adjusted customers reminder, in targeting targeting company. operation $X.X of $XXX supporting make cash the for in XXX the million $X.X the free good in AAM to full-year XXXX $X.X XXXX, XXXX in up, range to improve we're AAM range targeting it billion while watches, and To as wrap in quarter EBITDA performance a of the start is and then program

year the be for of first strong and a That activity profitability end the we forward We throughout sets continued by objectives or the support, We for us appreciate to and XX This your momentum expect thank performance of very and of while remarks attention the our are everyone I completed production achieving enhancing year. to strong end them of programs free and expected interest launch over of cash the half half GM is generation. prepared this operational all XX% full-size with that your FCA launch flow along up today. scheduled June trucks of AAM. to year and second the the of XXXX. building my in look from our

Chris over Chief Financial Let May. me Chris. now our turn Vice the call to Officer, President,

Christopher May

also XXXX good deck to of earnings you David today. I financial will I as comments. prepared our Thank the morning will slide everyone. you, my the part cover of refer with and first quarter results of details

the downtime sales. of XXXX AAM of The to Let's the shows walk of year-over-year the of on billion $X.X X sales at next well transition to Motors down XXXX. started FCA's with go of quarter as first first to representative get impact as process. quarter of of the $X.X production quarter assembly first of were X, mainly in truck as related Together, compared SUV the XXXX X relates these billion customer and platform sales. General pickup to a million a duty two ahead truck and XXXX Slide plants In decrease in changeover full-sized sales revenue generation first to heavy quarter $XXX basis. programs, lower model year-over-year volumes Ram part reduction their GM

for of Our foreign XX% by $XX the second market downs realized half it and that and net decreased billion new our backlog, factors timeframe. be business impacts. for The about backlog our mix currency is more for existing of of Sales net normal attrition projected million of XXXX annual and volume $X towards with other than during attrition price also impact normal programs. weighted to and metal

the in a see of of XXXX then the the the XXXX we the first revenues half similar this that truck reverse in pickup year-over-year downtime We second and launch. trend as we'll to quarter one-year expect to in but planned when decrease through get customer expect we anniversary reach compared GM new particular in

Now the XX.X% in let's $XXX or quarter XXXX. Gross the move was of sales first million in on $XXX.X profit the of was to million XXXX. XXXX to quarter $XXX of first sales XX.X% Adjusted of profitability. EBITDA first in or compared as of million quarter

improvement some on volume contribution down also $XX EBITDA Lower increases good and about manufacturing a year-over-year and since year, progress of on the made related by of in the On of we project quarter. improvements first year-over-year that subside impacted our to XXXX is half Slide lower margin quarter that a as normal of these pressures year. can compared our also adjusted on year. only have to launch $X XXXX. reduction million. in in a were You expect go half and the EBITDA to in seems year the X. not quarter for freight launch We year-over-year see by face of a of we cost saw experienced We've mix the but the this we year, we higher and also programs believe factors year-over-year price launches On see our the will a project within in related we continued out downs in impacted million begin higher million to sales basis, XXXX as The to basis, ago. performance these terrorists. here and basis, result the we of in especially second material throughout and lodge On inflationary compared the were to leveled as pressures third as in of $XX news impacted amount will by a we second costs of when the performance, costs walk experienced we area

utilities compared inflation experience such also a us impacted year-over-year the on run by to as $XX This and as basis. XXXX. of laborers to continued million We also on cost quarter first rate

We pressures should reduce actions results the positive that have trending and progresses. these we will year as mitigate and of a help series begun see inflationary

We $XX and continue of implemented improved the by the to in performance in of benefits that million see reduction quarter. integration our business consolidation the January activities unit we our synergies as benefit our cost

far of in were there's expectations fourth comparison call. earnings sequential provided from with our we quarter line we as of last the of to quarter EBITDA first the As the the on XXXX, XXXX

the when as million our for into realize expected expected EBITDA You X. Slide quarter these improvements by in see of pricing driven this due synergy and on range. the was the can the year. expenses the sales This all, that from mix the of volume on lower to half Metal an was than compared market and to $XX $X unfavorable quarter of operational expenses range. quarter. detail project our launch met were of of Normal first rest by $X our in performance, to foundation expectations The impact build profit foreign gives midpoint moved last expected timing fourth than second as million and throughout the a better some anticipated below higher All and in was operating the XXXX us we came of also currency were but million. quarter,

in it acquisition the As of restructuring and restructuring relates to of costs. we costs, quarter acquisition and first million $XX.X related related incurred XXXX

to million quarter in of sales. of expense of was Let quarter including R&D me of XXXX or the now of or $XX.X taxes. cover to XXXX. XXXX $XX.X R&D million and million $XX.X the quarter quarter sales. of in X.X% SG&A, million SG&A in interest XXXX X.X% the first was spending first This compared first $XX.X compares AAM's in the first

has The and manage and benefits, support XXXX. effort this lower was of expenditures continue we Even necessary process in the for of at expense in first interest we favorable drivers $X.XX to from R&D this a of investments make the to to quarter this expense the opportunities share XX.X%. the XXXX EPS. an a a tax the capitalized million believe focused and initially one-time overall sales Adjusted offset $XX.X regulations XXXX the business compared all higher million GAAP interest. or from XXXX. our of we of effective that benefit per the been in $XX.X per recorded you benefit rate XXXX. quarter, in $X.XX adjust net recorded quarter first integration by first of in of of to our calculation This $XX.X XXXX per Jobs the our charges of XXXX. $XX tax quarter Tax XXXX of XXXX quarter on cost of per these million is $X.XX related and was account, the debt or was of variable first when quarter quarter income The In the first quarter $X million interest Taking of more first were benefit the adjusted overall in income was debt $X.X first we passed. $XX.X the includes tax end When compared cost XXXX of first compared the for to area. are into impact restructuring at efficiencies our We EPS continue quarter share for our growth Net and in million Act and as excluded & rates net future for right Cuts to time. with the finalization transition of reduction around the tax the to benefit share balances benefiting million tax share

net move in expenditures, and by and less the provided adjusted restructuring be property, now impact to defines proceeds cash on million. flow equipment. first was payments free cash for Let's be Capital acquisition expenditures, activities, first from quarter the and of property, the free cash We for AAM the of to cash operating acquisition XXXX capital to sale costs. of cash Net Cash equipment XXXX of sheet. operating payments related of excluding and $XXX flow was balance plant net flow activities net cash free cash of quarter flow the plant define XXXX it for were the for for the and restructuring $XX.X used quarter of first activity proceeds $XX.X sale million. from related million.

holiday We It cash of between of $XX significant as cash million quarter acquisition the typically are shutdowns. we us to $XX common full outflow this receivable increasing inventory in to and a is XXXX. year year capital to of year-end the for of expect million of production and use is activity, and free the is a of off quarter working $XXX use first payments XXXX. have first continue a related had the accounts adjusted to impact million AAM for flow a be restructuring free Reflecting seasonal the

for was supplier debt perspective, XX available of debt twin net EBITDA approximately receipts, ended cash or was the a as end get customer our of March. leverage relate of to year to X.X a has the and target ratio and of launch quarter decrease ratio due expected of first the minus leverage we to to cash times our adjusted This lower to a net This debt timing takes impact addition EBITDA payments edited seasonal From use year-over-year well larger with debt end collections has net for year the In it EBITDA, balances calculation this to the divided total rebuildable our LTM XXXX. at due this increased by of on But adjusted of quarter by our the in months outflow. times as the year-over-year the last since no two EBITDA. confidence end leverage programs.

similar subsequent EBITDA see You'll to increases in periods LTM and then flow in quarter train in cash LTM a second EBITDA amounts. will the most impact generation reverse XXXX and likely of this due

of also our speaks our maturities We of have in We million $XXX prepaying we XX allocation announced to continued until debt capital flow release remainder do the and today of any debt now seven the our we remaining not significant the earnings have in our notes the reduction. that confidence are cash final year which and for beyond. XXXX

it cash borrowing facilities. to as global of March of liquidity, of has and available AAM capacity on As consisting XXXX over AAM's liquidity $X.X billion relates XX, credit

we operational a a to helpful adjusted our expected we the improvement, the how walk performance quarter quarter the last and financial have an dynamic to provided view way show of quarters of and our Therefore, is EBITDA we to time second near-term we expect grow also of As we from included to first heavy believe launch XXXX. unit our XXXX investors. work consolidation, this of business activity, two through while

truck, billion to revenue the While to heavy GM, additional Motors revenues related do to $X.X we have duty range on the downtime EBITDA. pickup anticipate a expect $X.XX impact we will to This General of several positive adjusted billion. increase weeks of

with improvements improvement to also in $XX million million targeting with factors, Contemplating $XX launch EBITDA new the rates. quarter for the to business sale $XXX time, to We this we expect be downtime another million AAM's half quarter. second to XXXX. be margin adjusted and expect run behind of operational over in us of synergy, backlog our these stronger our are range second customer's reaching and we $XXX quarter million At

Before a than unexpected let comments. current production noted launch of anticipated end across some targets move that to closing financial David Q&A, than says low end with our onto curse forecast few certain trending the wider me the for the XXXX and due it's slower programs globe. we our to

resolve though, We than also had plans performance, and profitability large of have on and participation rest us By and cash to taken through improvement track look free our we to to forward stop I'm the revenue a that call little and a planned. originally back are today. items the year. your over fully couple on increasing we you longer to in achieve here going for the Jason. flow Thank the call time turn to

Jason Parsons

you, and Chris. David Thank

no turn Q&A. two. We to will than more now Please limit all it over and questions

Operator

will next please The question of come go Barclays, from Brian ahead. Johnson

Brian Johnson

versus Good little as want other than you're to shortfall perhaps and there in or volumes consensus issue a about you two bit was of any versus on X either just anticipated to a so production forth. versus platforms due Is in XQ pressures costs DXK on could the direct to line. and like how you big significant There's cost morning. estimates. pretty lower XQ the dimension much launch is that E-drive way ram I much frankly talk -- HD we

Christopher May

Chris. certainly is Yes this Brian,

was not buying You of of well terms impact heavy our curves revenue that you in as -- Obviously, I from EBITDA of truck qualify The take all-wheel those know, anticipated. can as we drive to consensus category. new. rates. some would as some terms China relates majority the planned program the from motor's the and gentle a form our long base slower versus an in talked metal of from products our group duty broader previously, changes. of has little certainly in of than on been obviously, that main perspective the some delta little about weaker of revenues a see the ram

Brian Johnson

the… then, And

Christopher May

the contribution of with item margin delta bit have you a that course, little -- that associated you The E-drive mentioned. between

Brian Johnson

this And other the or costs kind volumes planned get go much you secondly, volumes ones major is -- we XH? pretty through by launch summer risks into large we there are or out in when launches either of are finished with or

David Dauch

got of first of launch year. those We've XX the XX% on launches half over the this of which year

So we're now right the extremely the busy being of big most with launches of year. half first the in here

However, have expect half larger expenses but well. half the the a we your year launch launches we compared coming do some second way in of the of our so second lot do to the project as first to be related it the down costs occurred of half.

Brian Johnson

highlighted then question; but metal final those plants of anything in kind some find to you've dry progress X fixing X and dine in the And is we've bring you there standards? as program covered the and or your the action a that's else required remedial facilities, actual business up gone through plant things of units to

Christopher May

ordinary. the of out Nothing

quarter XXXX become X the see we've to highlighted would beyond the stabilized. those the the improving making has then progress employer of that meaningful Twinsburg facility So third that X additional on facilities. anything and facility plants us already that issues to back We don't to

Brian Johnson

their supply sat gone the place, -- prepared. you and in machinery have plant comfortable get they down programs; upcoming have they're the with launch management through staffing, the gone chains to that you the Have through

Christopher May

and facilities very our also on got capability. of we're reviews we've status each supplier's the If management re-review extensive pass the to at

Operator

ahead. come next from go Please from The Morgan Sinkevicius Stanley. Armintas will question

Armintas Sinkevicius

the things flow implies that bridge to million. in the couple the to million X quarter get in burn a cash here; Just $XXX of remaining to roughly $XXX trying million $XXX first free quarters

at through know can know me the EBITDA guide rest what for know know there, adjusted million if CapEx you because $XXX. implies, I us look year gets the walk you the you $XXX you You the of

interest know maybe $XXX. You cash

So know account even to cash $XXX -- I take before million taxes. I you get into

that just cash to to the to you free the So get there. know bridge it flow helpful be

Christopher May

there. your common sketch Look about halfway

our taxes main -- those in based If EBITDA, know stated previously you you of CapEx, sort with take guidance on interest drivers topics. the associated

You know of flow cash over those $XXX in areas. million

quarter. example receivables million you quarter really is first just fourth working typically flips especially hundred hold fourth working with of dollars saw our $XXX it for of understand the and on in two relates to last That capital. The other year benefit associated in the is element critical million the receivables. to quarter We so just over in over consume the too alone capital

working concludes for course the and capital inventories .last Reaches the we other levels. flip our and of to well element those year grew will the element we preparing that will Because our of is ready course sequence as above So the our of through were the capital XXXX year-end goals reductions year. year also working inventory launches getting to the

know increase we $XX- $XX know You $XX- million. those you

leg to is Our a course inventories achievement. throughout of year objective reduce way in be other the of this that meaningful the course that would

Armintas Sinkevicius

Okay, helpful. that's

Christopher May

where to to it be. gets pretty need that close you you Together

Armintas Sinkevicius

down the quarter. you put first in EBITDA And the then, $X were versus out calling guide adjusted million

-- So low some end %X you moving so the for the year know for down$XX million. know the in the or guide, the $XX in casting to quarter factors supplier full down the E-Drive you is know that with you and you know there though just the rest down those is you first million the appreciate your of down coming the know you into of year. slower million that ram -- the the that's the anything carrying know bridges else issues $X but million us from

Christopher May

previously. previously guidance our of ranges $X.XX midpoint of about have $X.XXX revenue, end runs million was million the and now our our the consensus think you we low of now of EBITDA If guided to you

will revenue launches end bit than quarter little So we bit that. you quarter associated half those second a with the the of I to came that margin get these a would market the little you terms slower the of as contribution and low that of metal bit more of near some out well. be we're the little a utilization mean, of know you of certainly and little get moved a on first FX in The get the efficiency piece be of capacity drop. put E-Drive .you because range. and a Frank, slower

Armintas Sinkevicius

Okay, apologies. for one the I'm free going then? more intact still here question. to the break flow for guide, cash XX At the remain rule just Jason's guide, year does that three

Christopher May

was to it XXXX Yes, four year, XXXX. it was

Operator

question Capital Picariello go Markets. James of next come ahead. The from KeyBanc will Please

James Picariello

expectations If Can with that some and that expecting what you we of know feeling pricing well volume which how year level? recovery Just pricing at curious the of you mentioned you operating segment-- know year to mark? are of operating you your efficiencies margin curious. last row you assume decent some to but you know that the and castings noble you talk the remainder know improvement I know an about XQ Could for return I XX% XX%t profitability you just leverage. back half to pricing on see know within stick. the

David Dauch

the us we our thing almost prudence. us stabilize exception would the regards biggest business of our scrapping were the the all that, operation, business get issue with shortage for the address in well to in we improvements in as drove indicated efficiency majority with addressing we one. that the facilities manpower Clearly we as Once was as casting that dealing helped

appropriate operational again, driven So operating the find having a to in lot efficiently. but that to appropriate back the of put and manpower the available it facility patterns was place

the performance back to the and that we're manpower address of business. stick the progresses. costs other place was costs to year clearly higher price commercial as that and that digit commented, to the did inflationary to you of we on as think, benefit happy the things. additional incurred some into side know adjustments And side of you on get put will and from expect Those we were so improve I it being on double prices the the

James Picariello

you baking anticipated. about talk had you fines Can know you at are looks high back volumes originally ram a you're half. level slower what little you know in for large the a than Obviously like in

Thanks. that You program be think to rate would primary wondering know when you that you run and volumes the you of that driver program just might that -- consider you your guide your know know you down. hit

Christopher May

demand. of elsewhere. terms the to associated rate piece revenue in of with the some lower range. as There end was and revenues That of elements in of relates were a other some China our it But down volumes public run ram, certainly pretty with the I the mean to guide quarter the articulated well. product get and rate them through to here it's that's we're And they work expecting quickly. what in second as their consistent full on up commentary

Operator

Joseph The Spak RBC Capital of will from next come question Markets.

Joseph Spak

improvements. want I and little half inflection sort of know As dive second you sort on just can into the in this we the maybe focus of to performance bit more a EBITDA

that should year. and you previously, by, to think E-Drive million sort on you're It million what having some going for $XX was of in think the I $XX quarter not. help still first second -- was it issues Performance indicated back headwind I down that this is year over obviously similar quarter the about quarter we year then think year like year to the $XX in over you have the that benefit and a half? million

Christopher May

This from basis means when gap Joe. an remain an extremely similar on that perspectives probably we couple quarter improving delta trends. so will same maintaining know XXXX very in extent we're we're but to of -- mind, quarter Chris. absolute quarter performing you is keep quarter high XXXX, it the the the second to strong that quarter start previous our was compare of different from quarter, a would XXXX second second I second Yes,

we're You going about get in want to that develop XXXX. and think deliver how second half to of

us $X.X under revenue million $XXX with for our XXXX of know of right over the little midpoint the based quarter just EBITDA. You half on second get billion first of guidance, of that'll a

gets Company. We'll run that, analyze additional basis rate of over you a million on in about $XXX you billion sales. bring $X If it

very higher on truck contribution the these this and up are margin as our plants half. company. of in to size that running full contribution sizeable second will strong deliver Some the margin But

business up continue our benefits quarter through have the unit year, will quarter. step synergy to consolidation continuing up step benefits We here our to over

second normal first in know year, of meaningful straight, then the running a well that productivity second fashion you're core as get operation expense normal were sizeable about a quarter, launch dissipate As and items these the modulated abnormal then and in project as efficiency. was all half the more the through well you activities waited of other you delivering as you're up on project half you're you're these stable strong, running programs a series expense running. course as talking to

Joseph Spak

since business I like and If is brought at I million slide a look and X, it to because X savings. know reorganization you for there together you the guess the I you $XX the I a think consolidations you break know out ask can those can me is-- up synergies the $XX said give reason you I guys Buck million year. in only you $XX at -- million.

if this back MPG put So below know of know that only I think then you sort the the quarter. run out synergies were but know sort maybe you you the by line -- that's X know of that would the was the inaccurate. that were I rate of or maybe and you that's true across you means sort -- targeting for straight

So all of us like maybe break rate you and on synergy just of the sort New but if run MPG to savings -- it's that out I know sort original level. the versus long color are where still sort maybe savings the like here question possible York of give

Christopher May

question. good No,

on absolutely deliver be First we very run acquisition. clear, track to for savings and the rate are MPG

that quarter will took of year tail-end and first quarter, the year $X consolidation. the XX element was other small the there place step that first BU about very that to second amount, in place think of terms In so of significant the I or early a up. actions relates over took part the It quarter, of like number, very million

Operator

question JP Brinkman will come from of Ryan Morgan. The next

Ryan Brinkman

how ramp your -- question been some talk the seem strong the about about you even the just in would more VR the front. relative XQ and margin it's ramp softer can further identified to that confidence I the First versus down. haven't I on state is XQ? from on of previously shortfall to -- in just execution this execute but much yet. does and better to you is initiative much glide now been giving path was continue the find a well be guide sources find you've already rate you improvement talked in .so -- is modestly the from that and your entirely for guidance to What some because or XQ steeper that back in a achieve this to easier sequential of in cycling an full improvement investors performance the XQ even know, -- year confidence the sequential issues have implied I path improvements It you due of the to half take are of reasons know think how lot other made your XQ trajectory, needing ramp. think that bowling

David Dauch

we're First and to operational and that know all the that explain we here. through slide together the, chart the you incur a put on improvements that making mean challenges full you foremost, on X before we we bubble

this with and programs, cash the the whole there. GM transparent that's the know launches just have in over the We of these That a which the full the challenges size huge being in carrying the us. issue and they to programs you today. investment quarter. that half expected that we we're launches truck that E-Drive with big second running busy that on you is in, launch the Once big to Clearly, of don't dial in matter yes end have and for to The to able in not we half programs that operational a on be that? community the it's expectations and an here put second of year. launched the level to we're issue continue high the want the were a back we heavy programs first is focused know our know perform I very operational you us. behind very Major we ramp some and get to our issues deep place. of got issue comment very big be We've you back fully prior along the way were but get want at taking dialed the and being changeovers year these if what should us the first improvement rate get behind XX% just issue by only generators know capping through been That reinforce is this Chris, all quarter to

Christopher May

margin a that contribution half rate all XX% the XX% again down consolidation, we expense expense. of volume it in will these that hence context from as talked know Yes, that second our and improvement performance drops terms come first for margin conversion half you of improvement BU just the our so stepped of well to run that on elimination items take of Ryan, is plus higher project but synergies, margins well. will Normal as enhance project in the that the about through

Ryan Brinkman

on like how you verses left of guessing STV's crossover has because know are maybe you're between, And know XQ. case more that are XQ that vehicles much little lost is on revenue these you the parse talk it about generated can simply know revenue, underlying different lastly last indicate the I'm cadence because simply the bit is launches you then, more you to which programs up step maybe of could like how just issue. lower relating a of for out in a you you much which customer are which know volume a of demand pace concentrated would a so or that timing the

more just several little have a material I timing transients that's haven't don't think times. that in programs couple XQ quarter, pressure. or said but bit pressuring lack the that color a of suppliers of what's We in from heard -- you mention with explores they this these for always are that differences I revenue other which the on maybe leading thereof the

David Dauch

behinds being impacted coming car basis. down a global and foremost, passenger bayside for First on

the then term penetration and the duty we're being to and want races platforms. That's strongly so and addressing other third, and the Asia engine impacted very in are drive a program last quarter all related year. coming our you expect else that our varying bit. a anything especially regards the half to but is addressed degradation in slower the slid by about near than a second ram launch in what's in down know that customers and being the impacted really transmission driving issue ramp process there's programs the to we the Second, we're and heavy expected some them out of at what if planned there's couple happen but feel was you add. those why second of Chris little of issues

Christopher May

First, Ryan out degradation pointing you're of what consensus. the is

Our revenues are increasing. quarter over quarter

we programs as of lot a support well. on based know You

Operator

Lynch. your Murphy, And last John ahead. go question Bank Please Merrill come America from of

John Murphy

a correct? will half. of I that the here. lead end quick apologize follow I in programs that XX% that done correct actual on Just the the XX% is that in launches the your want one you on second Is really June in second through execution account of you add rolls half. backlog benefit of of Is in of think be second couple David, log coming earlier. ups said for problem by the I the to just but Chris an revenue said

Christopher May

that's way Yes, put to Absolutely it. fair correct.

John Murphy

what year run, you of Okay, key this has will kind which impact obviously. to the the this a alluded to that on big year that's-- way so

is we to opportunity at business for opportunity issue the casting there's little the business grow over whole take look but near a it term you be the at a to business, maybe you industry know may really in obviously short still greater win an there, of there some bit faster? in as you if is look that capacity Second, the or casting

Christopher May

our the on John focused We based and to we'll like on within opportunities, thing last the stabilizing expect been clearly have casting progress feel customer open business the we've we capacity Clearly, some year progresses. some and as meaningful get really stronger couple of made we do business very only that within quarters, units. the our here is we have just be operations, that biggest opportunistic we

John Murphy

second on the sight on issue. you more there ram the this like more a that quarter. expected. exactly more from said, handle you just that are have a communication any lastly, they this you what's little the saying going speaker -- a got or in I then we line little bit launches do confident kind they've on this a And Chris slipping than slip bit of is how rectified than know of HD, understand

Christopher May

Clearly, issues very own in very some strongly they issues that I supplier but the near by they're plant their feel that FCA also resolved the other have get they'll has term. issues so

John Murphy

great. Thank very Okay, you much guys.

Christopher May

American Thank you, your Axle. interest conclude John. for all today's That call. you will in Thank

Operator

now has conference The you thank concluded, and presentation. attending today's we for

You disconnect. may now

American Axle & Manufacturing (AXL) 3 May 192019 Q1 Earnings call transcript