• Revenue: $1.41 billion for Q1 2025, down from $1.61 billion in Q1 2024.
• Adjusted Earnings Per Share (EPS): $0.09 per share for Q1 2025.
• Operating Cash Flow: $55.9 million for Q1 2025.
• Adjusted Free Cash Flow: Use of $3.9 million for Q1 2025.
• Adjusted EBITDA: $177 million, or 12.6% of sales for Q1 2025.
• Gross Profit: $173.9 million for Q1 2025, compared to $198.5 million in Q1 2024.
• SG&A Expense: $90.9 million or 6.4% of sales for Q1 2025.
• Net Income: $7.1 million or $0.06 per share for Q1 2025.
• Net Debt: $2.1 billion as of March 31, 2025.
• Total Available Liquidity: Approximately $1.5 billion.
• 2025 Sales Guidance: $5.65 billion to $5.95 billion.
• 2025 Adjusted EBITDA Guidance: $665 million to $745 million.
• 2025 Adjusted Free Cash Flow Guidance: $165 million to $215 million.

• Warning! GuruFocus has detected 5 Warning Signs with AXL.

Release Date: May 02, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• American Axle & Mfg Holdings Inc (NYSE:AXL) reported first-quarter 2025 sales of $1.41 billion, demonstrating strong operational performance.
• The company achieved an adjusted EBITDA of $177 million, or 12.6% of sales, with a sequential improvement of approximately 100 basis points.
• Exiting joint ventures in China resulted in a cash collection of approximately $30 million, aligning with the company's focus on core businesses.
• The strategic combination with Dowlais is expected to yield approximately $300 million in synergies and enhance cash flow for deleveraging.
• The company maintains a strong liquidity position with approximately $1.5 billion in available liquidity, including cash and credit facilities.

Negative Points

• First-quarter 2025 sales decreased from $1.61 billion in the first quarter of 2024, primarily due to lower volumes in North America.
• Adjusted free cash flow was a use of $3.9 million, indicating challenges in cash generation despite operational improvements.
• The adjusted effective tax rate is expected to be approximately 50% due to valuation allowances and interest deduction limitations.
• The company faces macro uncertainty driven by new trade policies and tariff impacts, which could affect future operations.
• North American production was down approximately 5% year over year, impacting overall sales and profitability.

Q & A Highlights

Q: Can you provide insights on your capacity utilization in the US and any labor challenges you might face if you increase production? A: Our policy is to buy and build locally, and we aim for high-capacity utilization. We have some open capacity in our Three Rivers facility and other smaller plants. The labor situation has improved, though it's not fully resolved. If more jobs return to the US, increased robotics and automation will be necessary, which we are already implementing.

Q: What is the tariff exposure for Dowlais, and how does it compare to AAM's exposure? A: Dowlais manages its tariff exposure similarly to us, with production in the US, Mexico, and Europe. The combination with Dowlais will provide more size, scale, and production locations to navigate tariff issues effectively.

Q: How are GM's positive volume outlook and full-size truck production assumptions reflected in your guidance? A: Our guidance includes GM's full-size truck production of 1.3 to 1.4 million units. We are bullish on this platform, which includes light-duty, heavy-duty, and SUV applications. Demand remains strong, particularly for heavy-duty trucks and SUVs.

Q: Has macro volatility affected the timing of the Dowlais transaction? A: The macro environment hasn't complicated the process. Both companies operate independently but share a similar policy of buying and building locally. We are on track for shareholder votes in the third quarter and expect to close the transaction in the fourth quarter of 2025.

Q: How are customer production schedules looking in the near term, and is there any volatility? A: There is some volatility due to tariff policy issues, but some programs are running strong. We experienced some softening in the first quarter due to inventory adjustments and launches, but those are subsiding. We are monitoring the end of the second quarter and July shutdown activity closely.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.