Allison Transmission first-quarter net sales up 16%, net income falls

By Lisa Kerner

Charlotte, N.C., April 23 - Allison Transmission Holdings, Inc. reported strong financial results for the first quarter following its successful initial public offering in March, according to chairman, president and chief financial officer Lawrence E. Dewey.

Results were impacted by recovering global on-highway commercial vehicle end markets and increased global off-highway demand, said Dewey.

Debt repayments and repurchases partially offset by the effectiveness of $700 million of new interest rate swaps and less favorable mark-to-market expense for interest rate derivatives drove down interest expense to $41 million net for the quarter from $50 million for the first quarter of 2011.

Net leverage fell 26% to 3.89 times from the first quarter of 2011.

Adjusted free cash flow was up 22% for the period at $120 million, compared with $99 million for the same period in 2011, due in part to increased net sales and higher accounts payable.

Compared to the prior-year period, Allison's first-quarter net sales were up 16% at $602 million, and its net income rose 57% to $58 million.

Gross profit for the quarter was up 23% at $284 million, while gross margin was up 270 basis points at 47.2%, also compared to the prior-year period.

Looking ahead, Allison expects full-year 2012 net sales growth in the range of 5% to 7% and an adjusted EBITDA margin in the range of 33.5% to 34.5%.

Allison is an Indianapolis-based automatic transmission company.

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