Acquisition and Business Integration - Dauch Corporation completed the acquisition of Dowlais Group plc for approximately $1.7 billion, issuing about 117 million shares and increasing authorized shares from 150 million to 375 million[13]. - The acquisition of Dowlais Group plc was completed on February 3, 2026, for a total purchase price of approximately $1.7 billion, resulting in the issuance of approximately 117 million shares[151]. - The integration of the recently acquired business of Dowlais presents significant challenges and may not yield the anticipated benefits and synergies[112]. - The complexity of the integration may incur significant costs related to changes in internal controls over financial reporting, which could adversely affect the business and financial condition of the combined company[117]. - Dowlais has identified material weaknesses in its internal control over financial reporting, which could increase costs and management time required to meet Sarbanes-Oxley Act standards[118]. Financial Performance - Dauch Corporation's net sales for 2025 were $6,124.9 million, a decrease of $288.2 million or 4.7% compared to 2024, primarily due to lower production volumes and the sale of AAM India Manufacturing Corporation Pvt., Ltd. which accounted for a reduction of approximately $57 million[172]. - Gross profit for 2025 was $704.5 million, a decrease of $36.9 million or 5.0% from $741.4 million in 2024, with a gross margin of 12.1% for both years[174]. - Operating income decreased to $112.3 million in 2025 from $241.4 million in 2024, resulting in an operating margin decline to 1.9% from 3.9%[181]. - Net loss for 2025 was $19.7 million compared to net income of $35.0 million in 2024, with diluted loss per share at $0.17 versus diluted earnings per share of $0.29[195]. - Total Segment Adjusted EBITDA for 2025 was $743.2 million, slightly down from $749.2 million in 2024[206]. Customer and Market Dynamics - Sales to General Motors accounted for approximately 44% of consolidated net sales in 2025, up from 39% in 2023, while sales to Ford and Stellantis were 15% and 13%, respectively, in 2025[15][16][17]. - The company is focused on diversifying its customer base, recently securing new business with Scout Motors, Dongfeng, and others, while expanding its global presence[27][31]. - Sales to GM accounted for approximately 44% of consolidated net sales in 2025, 42% in 2024, and 39% in 2023, indicating a strong dependency on GM[65]. - The company anticipates increased competition from Chinese OEMs as they expand into new markets, which could adversely affect sales and market share[90]. Research and Development - The company launched seven new programs in 2025 and expects to introduce additional programs with GM, Audi, Volkswagen, and others in 2026[22]. - Dauch's investment in R&D has led to advancements in electric drive technology, with new business awards for electric driveline systems expected to begin production in 2027[30]. - The company is focusing on R&D to enhance its product portfolio, including hybrid and electric driveline systems, to meet evolving customer demands and reduce emissions[160]. Operational Challenges and Risks - The company faces risks from reduced demand for current and future product programs, which could adversely affect sales orders and financial performance[67]. - New product program launches may encounter timing and cost management challenges, impacting operational efficiency and profitability[71]. - Warranty, product recall, and liability claims could lead to significant costs, adversely impacting financial results[74]. - Labor relations are crucial, with potential disruptions from union negotiations and agreements affecting operational stability and costs[77]. - The transition to electric vehicles presents significant risks, including capital investment and uncertainty in consumer adoption, impacting production volume estimates[87]. Sustainability and Corporate Responsibility - The company aims to achieve net-zero carbon emissions by 2040 and has validated its targets with the Science Based Targets Initiative[38]. - The company plans to source 100% of its energy from renewable sources for global operations by 2035, achieving this goal for U.S. operations by the end of 2025[38]. - The company has established sustainable talent management programs focused on training and development, starting from early career programs to leadership development[47]. - The company maintains a comprehensive wellness program to support the health of associates and their families[48]. - The company has long-standing relationships with charitable organizations to support local communities through donations and volunteer hours[50]. Financial Obligations and Debt - The company has incurred approximately $5.4 billion in total indebtedness, including $2.9 billion from the Business Combination, which may adversely affect its financial condition and operations[91]. - The company is subject to various financial covenants under its Senior Secured Credit Facilities, which, if violated, could result in defaults and accelerate repayment obligations[92]. - The company has no significant debt maturities before 2028, indicating a stable financial position[208]. Employee and Labor Relations - As of December 31, 2025, the company employed approximately 18,000 associates globally, with 5,000 in the U.S. and 13,000 in non-U.S. locations[39]. - Approximately 76% of the 13,000 hourly associates are represented under collective bargaining agreements with various labor unions[39]. - The company actively partners with local union representatives to improve associates' safety conditions and personal development[46].

Financial Data and Key Metrics Changes - The company reported fourth quarter sales of approximately $1.4 billion, with full year sales of approximately $5.8 billion, reflecting a decrease from $6.12 billion in 2024 [6][16] - Adjusted EBITDA for the fourth quarter was $169 million, or 12.2% of sales, while for the full year it was $743 million, or 12.7% of sales, up from 12.2% in the previous year [6][7] - Adjusted earnings per share in the fourth quarter was $0.07, compared to a loss of $0.06 per share in the same quarter of 2024, and for the full year, it was $0.53 versus $0.51 in 2024 [19] Business Line Data and Key Metrics Changes - The company experienced margin improvement in both metal forming and driveline business units, focusing on operational efficiency [7][10] - The sale of the commercial vehicle axle business in India negatively impacted sales by $27 million in the fourth quarter [16] Market Data and Key Metrics Changes - North American production is expected to be approximately 15 million units in 2026, Europe at approximately 17 million units, and China at approximately 33 million units, with global production at approximately 93 million units [12] Company Strategy and Development Direction - The company aims to achieve efficient integration of the Dowlais acquisition, targeting $300 million in synergies with a focus on operational excellence and profitability [10][11] - The strategic combination is expected to enhance the product portfolio and customer base, supporting electric, hybrid, and ICE powertrains [10][14] Management's Comments on Operating Environment and Future Outlook - Management anticipates a challenging operating environment due to ongoing trade policy discussions and macroeconomic factors, but remains optimistic about achieving financial targets [12][30] - The company expects to generate adjusted free cash flow of $235 million to $325 million in 2026, with a focus on margin growth and capital allocation [25][26] Other Important Information - The company has changed its name from American Axle & Manufacturing Holdings, Inc. to Dauch Corporation, reflecting its new identity post-acquisition [13][14] - The company expects to incur cash costs associated with synergy capture in the range of $100 million to $125 million for 2026 [26] Q&A Session Summary Question: What is the outlook for the two individual businesses? - Management noted that both legacy businesses are experiencing similar market conditions, with slight declines in production forecasts for North America and Europe [34][35] Question: Can you clarify the cash flow situation considering restructuring costs? - Management expects to generate positive cash flow from operations even after accounting for restructuring and synergy costs, projecting $50 million of cash flow available for debt repayment in 2026 [40] Question: Is there potential for upside in the $300 million synergies? - Management expressed confidence in achieving the $300 million synergies and indicated potential for additional savings as they assess the Dowlais plants [48][49] Question: How will Dowlais's equity income be reported? - Dowlais's equity income will be reported as equity income in the P&L, contributing approximately $65 million to $75 million to adjusted EBITDA [61]

Financial Data and Key Metrics Changes - The company reported fourth quarter sales of approximately $1.4 billion, with full year sales at approximately $5.8 billion, a decrease from $6.12 billion in 2024 [5][16] - Adjusted EBITDA for the fourth quarter was $169 million, or 12.2% of sales, while full year adjusted EBITDA was $743 million, or 12.7% of sales, up from 12.2% in the previous year [6][17] - Adjusted earnings per share in the fourth quarter was $0.07, compared to a loss of $0.06 per share in the same quarter of 2024, with full year adjusted earnings per share at $0.53, up from $0.51 in 2024 [19] Business Line Data and Key Metrics Changes - The company experienced margin improvement in both metal forming and driveline business units, focusing on operational efficiency [6][10] - The sale of the commercial vehicle axle business in India negatively impacted sales by $27 million in the fourth quarter [16] Market Data and Key Metrics Changes - North American production is expected to be approximately 15 million units in 2026, Europe at approximately 17 million units, and China at approximately 33 million units, with global production at approximately 93 million units [11][12] Company Strategy and Development Direction - The company aims to achieve efficient integration of the Dowlais acquisition, targeting $300 million in synergies with a focus on operational excellence and profitability [9][10] - The strategic combination is expected to enhance the product portfolio and customer base, supporting electric, hybrid, and ICE powertrains [9][10] Management's Comments on Operating Environment and Future Outlook - Management anticipates a challenging operating environment due to ongoing trade policy discussions and macroeconomic volatility, but remains focused on managing controllable factors [11][12] - The 2026 financial outlook includes targeted sales of $10.3 billion to $10.7 billion and adjusted EBITDA of approximately $1.3 billion to $1.4 billion [12][23] Other Important Information - The company has changed its name from American Axle & Manufacturing Holdings, Inc. to Dauch Corporation, reflecting its new identity post-acquisition [12][14] - The company expects to generate adjusted free cash flow in the range of $235 million to $325 million for 2026 [24] Q&A Session Summary Question: What is the outlook for the two individual businesses? - Management noted that both legacy businesses are experiencing similar market conditions, with slight declines in production forecasts for North America and Europe [31][33] Question: Can you clarify the cash flow situation considering restructuring and integration costs? - Management expects to generate positive cash flow from operations even after accounting for restructuring and synergy costs, estimating a net cash flow of $50 million for 2026 [39] Question: Is there potential for upside in the $300 million synergies from the Dowlais combination? - Management expressed confidence in achieving the $300 million synergies and indicated potential for additional savings as they assess the plants post-acquisition [46][48] Question: How are Dowlais's equity income and IFRS adjustments impacting financials? - Management explained that Dowlais's equity income will be reported in the P&L and highlighted significant differences between IFRS and GAAP accounting that affect revenue and EBITDA comparisons [50][51]

Fourth Quarter 2025 Earnings Call 3 Business Update Forward-Looking Statements In this presentation, Dauch Corporation ("Dauch") makes statements concerning its expectations, beliefs, plans, objectives, goals, strategies, and future events or performance, including, but not limited to, certain statements related to future capital expenditures, expenses, revenues, economic performance, synergies, financial conditions, market growth, dividend policy, losses and future prospects and business; and management st ...

Financial Performance - Fourth quarter 2025 sales were $1.38 billion, flat year over year, while full year 2025 sales decreased to $5.84 billion from $6.12 billion in 2024[3] - The company reported a net loss of $(75.3) million in Q4 2025, compared to a net loss of $(13.7) million in Q4 2024; full year 2025 net loss was $(19.7) million, down from a net income of $35.0 million in 2024[4] - Net sales for Q4 2025 were $1,383.9 million, a slight increase from $1,380.8 million in Q4 2024, while total net sales for the year decreased to $5,836.7 million from $6,124.9 million[25] - Gross profit for Q4 2025 was $140.9 million, down from $154.3 million in Q4 2024, leading to a total gross profit of $704.5 million for the year compared to $741.4 million in the previous year[25] - Operating loss for Q4 2025 was $(33.8) million, a decline from an operating income of $36.2 million in Q4 2024, with total operating income for the year at $112.3 million, down from $241.4 million[25] - Net income for Q4 2025 was $(75.3) million, compared to a loss of $(13.7) million in Q4 2024, resulting in a total net loss of $(19.7) million for the year, down from a net income of $35.0 million[25] - The diluted earnings per share for Q4 2025 were $(0.63), a decrease from $(0.12) in Q4 2024, while the total diluted earnings per share for the year were $(0.17), down from $0.29[25] Cash Flow and Liquidity - Net cash provided by operating activities for Q4 2025 was $120.5 million, down from $151.2 million in Q4 2024; full year 2025 net cash provided was $411.6 million, compared to $455.4 million in 2024[6] - Adjusted free cash flow for Q4 2025 was $70.1 million, down from $79.2 million in Q4 2024; full year 2025 Adjusted free cash flow was $213.0 million, compared to $230.3 million in 2024[7] - Free cash flow for Q4 2025 was $55.0 million, a decrease from $73.6 million in Q4 2024, and for the full year 2025, it was $160.7 million, down from $213.4 million in 2024[36] - Cash and cash equivalents increased to $708.9 million as of December 31, 2025, from $552.9 million a year earlier, while total current assets rose significantly to $3,635.0 million from $1,914.8 million[27] Debt and Financing - Long-term debt increased to $4,039.1 million as of December 31, 2025, compared to $2,576.9 million in the previous year, indicating a significant rise in leverage[27] - The company reported a significant increase in net debt activity of $1,421.3 million in Q4 2025, compared to a decrease of $(56.2) million in Q4 2024, reflecting aggressive financing strategies[29] Future Projections - For 2026, the company targets sales in the range of $10.3 billion to $10.7 billion, with Adjusted EBITDA expected between $1.3 billion and $1.4 billion, including synergy benefits of $50 million to $75 million[16] - The company projects a targeted Adjusted EBITDA for full year 2026 between $1,300 million and $1,400 million, with a targeted full year 2026 Free Cash Flow of between $(115) million and $(90) million[38] - Capital expenditures are projected to be 4.5% to 5% of sales, with restructuring cash payments estimated between $110 million and $150 million[16] Operational Highlights - The company emphasizes the importance of successfully integrating the recent acquisition of Dowlais to enhance its market position as a leading Driveline and Metal Form supplier[3] - Dauch's production outlook for 2026 includes approximately 15.0 million units in North America, 16.9 million in Europe, and 32.7 million in China, totaling around 92.6 million globally[9] - Segment Adjusted EBITDA for Driveline in Q4 2025 was $132.2 million, slightly down from $133.3 million in Q4 2024, while Metal Forming increased to $36.8 million from $27.5 million[36] Other Financial Metrics - Adjusted EBITDA for Q4 2025 was $169.0 million, or 12.2% of sales, up from $160.8 million, or 11.6% of sales in Q4 2024; full year 2025 Adjusted EBITDA was $743.2 million, or 12.7% of sales, compared to $749.2 million, or 12.2% in 2024[5] - Interest income on debt held in escrow was $(13.6) million for both Q4 2025 and the full year 2025, indicating no change from the previous year[36] - The company incurred cash payments for restructuring and acquisition-related costs of $28.7 million in Q4 2025, significantly higher than $5.6 million in Q4 2024, with full year costs rising to $65.9 million from $16.9 million[36]

Core Insights - Dauch Corporation has successfully completed the acquisition of Dowlais Group plc and its subsidiaries, GKN Automotive and GKN Powder Metallurgy, marking a significant milestone for both companies [1][2] Company Overview - The combined entity will operate under the Dauch Corporation brand, emphasizing its capabilities in Driveline and Metal Forming for the global automotive industry [3] - Dauch Corporation is positioned to support various powertrains, including electric, hybrid, and internal combustion vehicles, with operations in 24 countries and over 175 locations [5] Leadership and Governance - The headquarters of the combined company will be in Detroit, MI, with David C. Dauch serving as Chairman and CEO [4] - The Board of Directors will expand to include two independent directors from Dowlais, effective February 5, 2026 [4] Brand and Commitment - The new brand platform, "Built to Perform," reflects Dauch's dedication to engineering excellence, operational discipline, and long-term value creation, aligning with customer expectations for quality and performance [3]

Core Viewpoint - Dauch Corporation and Dowlais Group plc have received court approval for their business combination, which is set to become effective on February 3, 2026, following the delivery of the court order to the Registrar of Companies [1][3]. Group 1: Court Sanction and Scheme Details - The court has sanctioned the Scheme of Arrangement, allowing the combination between Dauch and Dowlais to proceed [1]. - The Scheme will be effective after the Scheme Record Time, which is set for 6:00 p.m. on February 2, 2026 [1]. Group 2: Prospectus and Admission - Dauch has published a prospectus approved by the Financial Conduct Authority (FCA) for the admission of its common stock to the Official List and trading on the London Stock Exchange [2]. - This admission is part of the recommended cash and share combination with Dowlais [2]. Group 3: Company Overview - Dauch Corporation is a leading global Tier 1 Automotive Supplier, specializing in Driveline and Metal Forming technologies for electric, hybrid, and internal combustion vehicles [4]. - The company is headquartered in Detroit, MI, and operates nearly 75 facilities across 15 countries [4].

Core Viewpoint - The company has officially changed its name from American Axle & Manufacturing Holdings, Inc. to Dauch Corporation, effective January 26, 2026, as part of a strategic move in preparation for the acquisition of Dowlais Group and its subsidiaries [1][3]. Name Change Details - The name change was filed with the Secretary of State of Delaware and will be effective at 12:01 a.m. Eastern Time on January 26, 2026 [1]. - Effective February 5, 2026, the company's common stock will cease trading under the ticker symbol "AXL" and will begin trading under the new ticker symbol "DCH" [2]. - Existing stock certificates will remain valid until exchanged for new ones reflecting the new name [2]. Strategic Implications - The name change is described as a transformational moment for the company and its stockholders, aligning with a long-term strategy to enhance clarity, confidence, and performance [3]. - The new branding will be rolled out in conjunction with the completion of the acquisition, expected on February 3, 2026 [3]. Company Overview - Dauch Corporation is a leading global Tier 1 Automotive Supplier, focusing on designing, engineering, and manufacturing driveline and metal forming technologies for electric, hybrid, and internal combustion vehicles [5]. - The company is headquartered in Detroit, MI, and operates nearly 75 facilities across 15 countries, emphasizing a commitment to a safer and more sustainable future [5].

Core Insights - American Axle & Manufacturing (AXL) has received regulatory approval from China for its $1.44 billion acquisition of Dowlais Group, which owns GKN Automotive, with the deal expected to close in Q1 2026, pending further approvals [1][10] Group 1: Acquisition Details - The acquisition will result in a combined entity under American Axle's leadership, expanding its product range and global presence, with a focus on electric vehicle technology [2][3] - AXL shareholders will own approximately 51% of the combined company, while Dowlais shareholders will hold about 49% and receive cash plus shares [5][10] Group 2: Regulatory Approval - China's State Administration for Market Regulation (SAMR) granted approval with conditions to protect competition, focusing on fair supply terms and pricing practices in the Chinese market [6][7][10] - The approval requires American Axle and Dowlais to honor existing supply contracts and avoid unfair pricing practices to ensure that Chinese automakers are not adversely affected by the merger [7][10] Group 3: Industry Context - The acquisition occurs amid significant changes in the global auto industry, with a strong emphasis on investments in electric and hybrid vehicle technologies [3][4] - The merger aims to create a larger, more diversified global auto parts supplier, enhancing financial strength and innovation capabilities to meet evolving customer demands [4]

Core Viewpoint - The Chinese National Market Regulatory Administration has conditionally approved the acquisition of Doleis Group by American Axle Manufacturing Holdings, emphasizing the importance of fair competition and stable supply in the automotive transmission system market [1] Group 1: Acquisition Details - The acquisition involves a significant player in the global automotive transmission system products market, which is crucial for ensuring the safe and stable operation of vehicles [1] - American Axle, established in 1998 in the U.S., focuses on the production and sales of transmission system products and other automotive components [1] - Doleis, founded in 2023 in the U.K., primarily produces automotive transmission systems, sintered metal products, and metal powders [1] Group 2: Regulatory Conditions - The approval includes four commitments from American Axle and Doleis: fair and non-discriminatory supply, provision of development opportunities, adherence to contracts, and stable pricing [1] - These commitments aim to ensure reasonable pricing and stable supply of high-performance automotive components, protecting the interests of downstream customers and consumers [1] - The regulatory review considered the potential impact of the transaction on competition in China's automotive power transmission unit and rear-drive module markets [1]