American Axle & Manufacturing (AXL) - 2025 Q4 - Annual Results

Financial Performance - Fourth quarter 2025 sales were $1.38 billion, flat year over year, while full year 2025 sales decreased to $5.84 billion from $6.12 billion in 2024[3] - The company reported a net loss of $(75.3) million in Q4 2025, compared to a net loss of $(13.7) million in Q4 2024; full year 2025 net loss was $(19.7) million, down from a net income of $35.0 million in 2024[4] - Net sales for Q4 2025 were $1,383.9 million, a slight increase from $1,380.8 million in Q4 2024, while total net sales for the year decreased to $5,836.7 million from $6,124.9 million[25] - Gross profit for Q4 2025 was $140.9 million, down from $154.3 million in Q4 2024, leading to a total gross profit of $704.5 million for the year compared to $741.4 million in the previous year[25] - Operating loss for Q4 2025 was $(33.8) million, a decline from an operating income of $36.2 million in Q4 2024, with total operating income for the year at $112.3 million, down from $241.4 million[25] - Net income for Q4 2025 was $(75.3) million, compared to a loss of $(13.7) million in Q4 2024, resulting in a total net loss of $(19.7) million for the year, down from a net income of $35.0 million[25] - The diluted earnings per share for Q4 2025 were $(0.63), a decrease from $(0.12) in Q4 2024, while the total diluted earnings per share for the year were $(0.17), down from $0.29[25] Cash Flow and Liquidity - Net cash provided by operating activities for Q4 2025 was $120.5 million, down from $151.2 million in Q4 2024; full year 2025 net cash provided was $411.6 million, compared to $455.4 million in 2024[6] - Adjusted free cash flow for Q4 2025 was $70.1 million, down from $79.2 million in Q4 2024; full year 2025 Adjusted free cash flow was $213.0 million, compared to $230.3 million in 2024[7] - Free cash flow for Q4 2025 was $55.0 million, a decrease from $73.6 million in Q4 2024, and for the full year 2025, it was $160.7 million, down from $213.4 million in 2024[36] - Cash and cash equivalents increased to $708.9 million as of December 31, 2025, from $552.9 million a year earlier, while total current assets rose significantly to $3,635.0 million from $1,914.8 million[27] Debt and Financing - Long-term debt increased to $4,039.1 million as of December 31, 2025, compared to $2,576.9 million in the previous year, indicating a significant rise in leverage[27] - The company reported a significant increase in net debt activity of $1,421.3 million in Q4 2025, compared to a decrease of $(56.2) million in Q4 2024, reflecting aggressive financing strategies[29] Future Projections - For 2026, the company targets sales in the range of $10.3 billion to $10.7 billion, with Adjusted EBITDA expected between $1.3 billion and $1.4 billion, including synergy benefits of $50 million to $75 million[16] - The company projects a targeted Adjusted EBITDA for full year 2026 between $1,300 million and $1,400 million, with a targeted full year 2026 Free Cash Flow of between $(115) million and $(90) million[38] - Capital expenditures are projected to be 4.5% to 5% of sales, with restructuring cash payments estimated between $110 million and $150 million[16] Operational Highlights - The company emphasizes the importance of successfully integrating the recent acquisition of Dowlais to enhance its market position as a leading Driveline and Metal Form supplier[3] - Dauch's production outlook for 2026 includes approximately 15.0 million units in North America, 16.9 million in Europe, and 32.7 million in China, totaling around 92.6 million globally[9] - Segment Adjusted EBITDA for Driveline in Q4 2025 was $132.2 million, slightly down from $133.3 million in Q4 2024, while Metal Forming increased to $36.8 million from $27.5 million[36] Other Financial Metrics - Adjusted EBITDA for Q4 2025 was $169.0 million, or 12.2% of sales, up from $160.8 million, or 11.6% of sales in Q4 2024; full year 2025 Adjusted EBITDA was $743.2 million, or 12.7% of sales, compared to $749.2 million, or 12.2% in 2024[5] - Interest income on debt held in escrow was $(13.6) million for both Q4 2025 and the full year 2025, indicating no change from the previous year[36] - The company incurred cash payments for restructuring and acquisition-related costs of $28.7 million in Q4 2025, significantly higher than $5.6 million in Q4 2024, with full year costs rising to $65.9 million from $16.9 million[36]