Allison Transmission Holdings, Inc. · NYSE:ALSN
Allison Transmission — Q4 2018 Earnings Presentation
14 slides from Allison Transmission's earnings presentation, Feb 25, 2019
Slide 1: Q4 2018 Earnings Release
Q4 2018 Earnings Release Published February 25, 2019 (Earnings Conference Call February 26, 2019) David Graziosi, President & Chief Executive Officer Fred Bohley, Vice President & Chief Financial Officer 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement The following information contains, or may be deemed to contain, “forward-looking statements” (as defined in the U.S. Private Securities Litigation Reform Act of 1995). The words “believe,” “expect,” “anticipate,” “intend,” “estimate” and other expressions that are predictions
Slide 3: Non-GAAP Financial Information
Non-GAAP Financial Information We use Adjusted EBITDA and Adjusted EBITDA as a percent of net sales to measure our operating profitability. We believe that Adjusted EBITDA and Adjusted EBITDA as a percent of net sales provide management, investors and creditors with useful measures of the operationa
Slide 4: Call Agenda
Call Agenda Q4 2018 Performance 2019 Guidance 4
Slide 5: Q4 2018 Performance Summary
Q4 2018 Performance Summary ($ in millions) Q4 2018 Q4 2017 % Variance Net Sales $647 $588 10.0% Gross Margin % 52.2% 49.0% 320 bps Net Income $147 $215 (31.6%) Adjusted EBITDA(1) $261 $210 24.3% Commentary Net Sales: increase was principally driven by higher demand in the Outside North America Off-
Slide 6: Q4 2018 Sales Performance
Q4 2018 Sales Performance ($ in millions) End Markets Q4 2018 Q4 2017 % Variance Commentary Principally driven by higher demand for Rugged Duty Series and North America On-Hwy $303 $287 6% Highway Series models Principally driven by lower demand from hydraulic fracturing North America Off-Hwy $17 $2
Slide 7: Q4 2018 Financial Performance
Q4 2018 Financial Performance ($ in millions, except per share data) Q4 2018 Q4 2017 $ Var % Var Commentary Net Sales $647 $588 $59 10.0% Increase was principally driven by higher demand in the Outside North America Off-Highway and North America On-Highway end markets, price increases on certain pro
Slide 8: Q4 2018 Cash Flow Performance
Q4 2018 Cash Flow Performance ($ in millions) Q4 2018 Q4 2017 $ Variance % Variance Commentary Principally driven by increased gross Net Cash Provided by profit, lower cash income taxes and cash $232 $166 $66 39.8% interest expense partially offset by Operating Activities increased working capital P
Slide 9: 2019 Guidance – End Markets Net Sales Commentary
2019 Guidance – End Markets Net Sales Commentary ($ in millions) 2018 2019 End Market Commentary Net Sales Midpoint Principally driven by anticipated market share gains in Class 4-5 truck as a result of North America On-Hwy $1,317 5% the recent medium duty commercial truck launches by Chevrolet and
Slide 10: 2019 Guidance - Summary
2019 Guidance - Summary ($ in millions) Guidance Commentary Guidance reflects lower demand in the North America Off- Highway and Service Parts, Support Equipment & Other end markets principally driven by hydraulic fracturing Net Sales Change $2,580 to $2,680 applications partially offset by increase
Slide 11: Appendix: Non-GAAP Financial Information
APPENDIX Non-GAAP Financial Information 11
Slide 12: Non-GAAP Reconciliations (1 of 3)
Non-GAAP Reconciliations (1 of 3) Adjusted EBITDA reconciliation Three months ended $ in millions, Unaudited For the year ended December 31, December 31, 2014 2015 2016 2017 2018 2017 2018 Net income (GAAP) $229 $182 $215 $504 $639 $215 $147 plus: Interest expense, net 138 114 101 103 121 25 31 Inco
Slide 13: Non-GAAP Reconciliations (2 of 3)
Non-GAAP Reconciliations (2 of 3) Adjusted Free Cash Flow reconciliation Three months ended $ in millions, Unaudited For the year ended December 31, December 31, 2014 2015 2016 2017 2018 2017 2018 Net Cash Provided by Operating Activities (GAAP) $573 $580 $591 $658 $837 $166 $232 (Deductions) or Add
Slide 14: Non-GAAP Reconciliations (3 of 3)
Non-GAAP Reconciliations (3 of 3) Guidance reconciliation $ in millions Guidance Year Ending December 31, 2019 Low High Net Income (GAAP) $ 535 $ 585 plus: Income tax expense 158 168 Interest expense, net 126 126 Depreciation and amortization 157 157 UAW Local 933 retirement incentive 9 9 Stock-base
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