Allison Transmission ends Q1 with $160 million cash, returns $100 million to shareholders

By Lisa Kerner

Charlotte, N.C., April 17 - Allison Transmission Holdings, Inc. ended its first quarter of fiscal 2014 with $160 million of cash, $453 million of revolver availability and net leverage of 3.86 times, according to chief financial officer David Graziosi during an earnings conference call on Thursday.

"Allison continued to demonstrate solid free cash flow conversion and a capital allocation policy focused on the return of capital to shareholders, while pursuing a prudent level of net leverage," Graziosi said. "In addition, we enhanced our liquidity profile and capital allocation flexibility by increasing Allison's revolving credit facility commitments from $410 million to $465 million."

During the quarter, the company completed a $100 million share repurchase and paid a quarterly dividend of $0.12 cents per share, said chief executive officer Larry Dewey on the call.

Financial highlights

For the first quarter, Allison's net sales were up 8% at $494 million, primarily driven by the continued recovery in the North America on-highway end market and higher demand in the service parts, support equipment and other end market, according to the earnings news release.

The Indianapolis-based automatic transmission company reported first-quarter diluted earnings per share of $0.28.

Adjusted net income for the quarter was $108 million compared to $80 million for the same period in 2013.

The company reported adjusted EBITDA for the quarter of $166 million, or 33.6% of net sales, compared to $141 million, or 30.8% of net sales, for the prior-year period.

Allison's first-quarter adjusted free cash flow was $91 million, almost double that from a year ago.

Guidance

According to Dewey, the company is affirming its full-year 2014 guidance announced in February.

Net sales are expected to increase in the range of 3% to 6%, and adjusted free cash flow is expected to be in the range of $375 million to $425 million.

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