Accuride Corporation was busy on Monday, releasing its preliminary third quarter earnings and announcing it has filed its definitive proxy materials with the U.S. Securities and Exchange Commission in connection with the company’s Special Meeting of Shareholders to vote on the transaction with affiliates of Crestview Partners.
Regarding the latter, Accuride says the Special Meeting is scheduled for Nov. 15, 2016. Shareholders of record as of Oct. 10, 2016 will be entitled to vote at the Special Meeting.
As previously announced last month, Accuride signed a definitive agreement to be acquired by affiliates of Crestview, a leading private equity firm, for $2.58 per share in cash. The Accuride Board of Directors unanimously recommends that shareholders vote “FOR” the proposed merger on the proxy card today.
In connection with the filing and mailing of its definitive proxy statement, Accuride says it is mailing a letter to shareholders detailing the value of the Crestview transaction for shareholders.
In its letter, Accuride highlights that:
- Accuride shareholders will receive a substantial premium and immediate and certain cash value for their shares;
- The Crestview transaction is the outcome of a lengthy, thorough and comprehensive strategic alternatives review; and
- The Crestview transaction eliminates standalone risk during a period of ongoing challenges in the North American commercial vehicle industry.
In releasing its preliminary Q3 results, Accuride says it has revised its full-year 2016 Revenue, Adjusted EBITDA and Free Cash Flow guidance. The preliminary results and revised 2016 guidance exclude the results of the recently divested Brillion Iron Works business.
The company says its preliminary unaudited results from continuing operations indicate that revenue for the third quarter 2016 is expected to be approximately $125 million, compared with $145.6 million in the third quarter 2015. Accuride expects Adjusted EBITDA in the third quarter 2016 to be in the range of $13 million to $14 million, compared with $21.6 million in the same quarter last year.
Accuride expects 2016 revenue from continuing operations to be in the range of $535 million to $545 million, with Adjusted EBITDA to be $68 million to $72 million. Free Cash Flow is expected to be $2 million to $6 million, excluding approximately $10 million of negative Free Cash Flow related to Brillion prior to its divestiture, the company says.
Adjusted EBITDA is defined as net income or loss before income tax expense or benefit, interest expense, net, depreciation and amortization, noncontrolling interest in subsidiaries, restructuring, severance and other charges, impairment and currency losses, net. Free Cash Flow is defined as cash from operations less purchase of plant, property and equipment. Adjusted EBITDA and Free Cash Flow should not be considered alternatives to net income (loss), cash from operations or other traditional indicators of operating performance and cash flows determined in accordance with accounting principles generally accepted in the United States.
“This continues to be a challenging time for the North American commercial vehicle industry,” says Accuride President and CEO Rick Dauch. “The negative impact of this cyclical downturn on demand for aluminum wheels and softness in the aftermarket for Gunite’s products has been more significant than anticipated. While our leadership team proactively took aggressive actions earlier this year to lower our costs in response to these headwinds, forecasted industry volumes continued to be revised downward for the second half of the year and we believe that this challenging market environment will continue into 2017.”
