Accuride Corp. says its Fix and Grow strategy is working, reporting operating income for the second quarter doubled year over year. The first half of 2014 is the first time it's reported positive net income since 2007.
Second quarter 2014 net sales from continuing operations were $181.6 million, compared with $179.9 million in the same period in 2013, an increase of 0.9%.
The company reported net income from continuing operations of $5.1 million, or $0.11 per share, during the quarter, compared to a 2013 second-quarter net loss of $5.1 million, or $0.11 per share. (Net income in second quarter of 2014 included a benefit of $2.2 million, or 0.04 per share, related to Mexico tax reform and a reduction in long-term income tax payable.)
"Equipment orders were higher each month this quarter over the prior year, extending backlogs and filling build schedules in the segments we serve, while freight demand and the aftermarket stayed healthy," said President and CEO Rick Dauch. "As the industry outlook solidified this quarter, so did Accuride’s profit-generation power."
"Accuride was net income positive on a year-to-date basis through June for the first time since the onset of the industry recession in 2007. Wheels and, particularly, Gunite saw continued incremental margin expansion in the quarter due to reduced costs and improved operating efficiency.”
As Class 8 net orders for the entire quarter increased 19% year-over-year, truck makers further increased production, with net order growth within each segment Accuride serves. Class 5-7 and Trailer net orders also improved, with year-over-year increases of 7% and 35%, respectively.
Based on continued order strength, Accuride officials say they anticipate strong, steady equipment builds across all segments in the second half of the year.
Accuride Wheels segment net sales were $101.2 million, up $1.7 million, or 1.7%, from the same period in 2013, primarily due to stronger OEM truck and trailer demand that was partially offset by market share changes between truck OEMs and lower OEM light duty and military demand.
Gunite segment net sales were $48.3 million, down $2.9 million, or 5.7%, from the second quarter of 2013, primarily due to weaker-than-expected aftermarket demand for brake drums.
Accuride said it's increasing its guidance range for 2014 net sales to $675 million to $700 million.