INDUSTRY-LEADING COMMERCIAL VEHICLE PRODUCTS. Accuride Third Quarter 2015 Earnings Call. accuridecorp.com

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1 INDUSTRY-LEADING COMMERCIAL VEHICLE PRODUCTS Accuride Third Quarter 2015 Earnings Call

2 Forward Looking Statements Statements contained in this news release that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding Accuride s expectations, hopes, beliefs and intentions with respect to future results. Such statements are subject to the impact on Accuride s business and prospects generally of, among other factors, market demand in the commercial vehicle industry, general economic, business and financing conditions, labor relations, governmental action, competitor pricing activity, expense volatility and other risks detailed from time to time in Accuride s Securities and Exchange Commission filings, including those described in Item 1A of Accuride s Annual Report on Form 10-K for the fiscal year ended December 31, Any forward-looking statement reflects only Accuride s belief at the time the statement is made. Although Accuride believes that the expectations reflected in these forward-looking statements are reasonable, it cannot guarantee its future results, levels of activity, performance or achievements. Except as required by law, Accuride undertakes no obligation to update any forward-looking statements to reflect events or developments after the date of this news release. 2

3 Agenda Opening Comments Q Overview Industry Conditions Accuride 2015 Priorities Lightweight Drum Technology Financial Results & Outlook Q3 & YTD 2015 Results 2015 Outlook Summary Q&A Rick Dauch President & CEO Rick Dauch Greg Risch SVP & CFO Rick Dauch Rick Dauch Greg Risch 3

4 Q Overview Achievements Profitable Q Performance: - Revenue decreased by 11.2 percent to $163.4 million - Adjusted EBITDA of $19.2 million improved to 11.7 percent of sales - Net income of $0.04 per share compared to $0.02 per share in Cash of $39.1 million and total liquidity of $81.2 million Strong Class 5-8 Industry Demand Continues: - Moderating Class 8 and Trailer order patterns; some cancellations but healthy backlogs - Class 5-7 orders remain strong Opportunities in Wheels and Gunite: - North American LTA negotiations in Wheels underway - Quoting new business opportunities in Wheels and Gunite - Continued strong aftermarket demand for aluminum wheels and brake drums Challenges End markets at Brillion Iron Works: - Strong headwinds in Brillion s end markets - Expect unit s year-over-year revenue to be down 25 to 30% 4

5 Class 5-8 Industry Indicators are Positive ISM Manufacturing Index Housing Starts Auto & Light Truck Sales Expansion has slowed Starts remain strong Continued strength Fleet Utilization Fleet Age Diesel Prices Avg. Age in Years Capacity remains very tight Downward trend Diesel prices remain low strength in Class 5-8 Truck & Trailer supply & demand Sources: ACT, FTR 5

6 Build Projections Sources: ACT, FTR Strengthening US economy should keep builds relatively robust in 2016 Class 8 builds likely peak in 2015 but still in the K range in 2016 Continued steady recovery in Class 5-8, could accelerate with strengthening housing builds and highway funding bill approval 6

7 Accuride Industry Honors Premier Industry award based on Lean & Quality Systems Henderson, KY - September 2014 Rockford, IL September 2015 Erie, PA September 2015 Accuride Henderson Operations Masters of Quality (MOQ) Award Henderson, KY (11 time winner) Monterrey, MX (5 time winner Camden, SC (winner in first year of operation) Accuride Rockford Operations Accuride Erie Operations Accuride de Mexico - Monterrey Accuride Camden Operations 2015 Plex Impact Award for Transformation ERP implementation to modernize information & Manufacturing Execution systems 7

8 Brillion End Market Headwinds Commodity Price Indices, Monthly Brillion Revenue % 12% 16% 23% 15% 21% AGRICULTURE METAL/MINING ENERGY CONSTRUCTION MED/HEAVY TRUCK OTHER Source: World Bank 3,000 2,500 2,000 1,500 1,000 Baker Hughes Oil Rig Count 2014 Revenue = $131.8 million Approximately 60% of Brillion s revenue related to oil & gas, mining and agriculture End markets are not expected to recover until Largest oil & gas customer has over 12 months of inventory After strong 1Q15, sharp drop in commodity prices started to impact demand 8

9 Brillion Update Tough Times Market conditions have deteriorated rapidly in Brillion s core markets down >30-40% A number of Brillion s customers have reduced their outlook for 2015 and Large mining and construction equipment manufacturer recently reduced outlook for 2015 and currently Large agricultural manufacturer is currently forecasting sales of agricultural equipment to be down 25% in 2015 Tight cost controls and deep headcount reductions made quickly to minimize impact without damaging business long term Capital expenditures will be reduced to maintenance of business after installation of new casting line in 4Q15 (1Q16 payment) $40.0 $35.0 $30.0 $25.0 $20.0 $15.0 $10.0 $5.0 $ Revenue by Quarter $35.0 $37.6 $34.1 $32.1 $30.6 $24.0 $17.8 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Salary & Hourly Headcount Q4-14 Q1-15 Q2-15 Q3-15 Salary Hourly 9

10 New Disa 250-C $6 million investment in Replaces worn out 35 year old casting line - Install 4Q15; Qualify and Launch 1Q16 - Improved quality and cost performance on current book of business Allows us to compete for new business in multiple industry segments including light truck and automotive Sales force expanded through rep firms to cover new segments Improved operational performance, new market segments

11 2015 Priorities Achieve or Exceed Guidance Revision required due to Brillion End-Markets - Revenue - $700 million to $750 million $675 million to $700 million - Adjusted EBITDA - $85 million to $95 million $80 million to $85 million - Free cash flow - $15 million to $25 million $10 million to $15 million Maintain World-Class Operating Standards On track - On-time delivery, Lead times, Quality, Safety and Scrap Complete Plex ERP Implementation On track - 1H Launched Accuride Distribution Center and London, Ontario No issues - July Monterrey, Mexico No issues - October Rockford, IL No issues Organically Grow Revenue by 3% to 5% On track - OEM Securing long-term agreements Original Equipment & Private Label (ex: DTNA) - Fleet conversion to Accuride wheels and wheel end technologies - Aftermarket seeing support across multiple channels Develop & Introduce Industry Leading Product Technology On track Explore and Execute Global Growth Initiatives On track 11

12 Lightweight Drum Technology. 12

13 Compelling Industry Dynamics U.S. EPA issued rules to reduce greenhouse gases (GHG) and improve the fuel efficiencies for medium- and heavy-duty trucks Phase I standards apply to new vehicles manufactured in the model years : 20% reduction in fuel/mile for Tractor-Trailer Class % reduction in fuel/mile for Vocational Class 2b-5, 6-7, % reduction in fuel/mile for HD Pick-ups/Vans Gas/Diesel Phase II announced summer of 2015 ; Comment period closed on Oct. 1 Builds on the success of Phase 1, with similar design and vehicle categories. For the first time, fuel efficiency standards for trailers will be included Phase in from MY2018 (trailers only) - MY2027 Truck fuel consumption increases significantly with the weight of the vehicle A 10% drop in the truck weight reduces fuel use between 5-10% Fuel costs significantly impact the profitability of fleets in North America It is estimated that on average fuel purchases account for over 35% of total freight costs 65% of tractor trailer cost/mile = Fuel Weight reduction initiatives required to reduce costs / meet new EPA standards 13

14 Lightweight Drum Technology Development: month development period Technology: Patented lightweight brake drum for commercial vehicle and military markets Cast aluminum drum with a selectively reinforced wear surface Reinforcement is from metal matrix composite (MMC) preform 61 lb. drum saves approximate 100 lb. per axle (~300 lb. per 3-axle Class 8 truck) 5 issued U.S. Patents (product and process) 2 pending U.S. Patent applications Reinforced wear surface provides improved braking performance & longer life (2x-3x) Drums Prototyped and Field Tested Interest from U.S. Military Tactical Wheeled Vehicle Programs and Defense OEM's Major US Truck OEM has invested in MMC prototypes and completed significant field tests with positive results Innovative Innovative brake drum brake technology saves 100 lbs. per axle 14

15 Q Results. 15

16 3 rd Quarter Results QTD Period Ending Sept. 30, $ Millions Actual Actual Actual Actual Net Sales $187.3 $155.3 $184.0 $163.4 YOY Growth (9.2%) (17.1%) 18.5% (11.2%) Operating Income (Loss) (7.8) (0.7) Percent to Sales (4.2%) (0.5%) 5.5% 4.6% Net Interest Income (Expense) (8.9) (8.7) (8.4) (8.2) Other Income (Expense) (0.8) (1.1) Profit (Loss) Before Tax From Cont Ops $(15.9) $(8.9) $0.8 $(1.9) Tax (Provision) Benefit Net Income (Loss) From Cont Ops $(15.8) $(8.4) $1.2 $1.8 Discontinued Operations, Net of Tax (1.9) (10.2) (0.1) 0.0 Net Income (Loss) $(17.7) $(18.6) $1.1 $1.8 EPS Basic (0.37) (0.39) EPS Fully Diluted (0.37) (0.39) Adjusted EBITDA $12.3 $11.2 $21.2 $19.2 Percent to Sales 6.6% 7.2% 11.5% 11.7% 16

17 YTD Results YTD Period Ending Sept. 30, $ Millions Actual Actual Actual Actual Net Sales $646.1 $498.2 $532.4 $532.5 YOY Growth 7.6% (22.9%) 6.9% 0.0% Operating Income (Loss) Percent to Sales 1.5% 0.1% 5.4% 5.8% Net Interest Income (Expense) (26.3) (26.6) (25.4) (25.0) Other Income (Expense) (1.5) (2.4) Profit (Loss) Before Tax From Cont Ops $(16.0) $(25.9) $2.1 $3.7 Tax (Provision) Benefit (2.8) (2.4) Net Income (Loss) From Cont Ops $(18.8) $(28.3) $3.0 $7.3 Discontinued Operations, Net of Tax (2.6) (11.7) (0.2) 0.3 Net Income (Loss) $(21.5) $(39.9) $2.8 $7.6 EPS Basic (0.45) (0.84) EPS Fully Diluted (0.45) (0.84) Adjusted EBITDA $59.6 $37.2 $62.3 $66.3 Percent to Sales 9.2% 7.5% 11.7% 12.5% 17

18 Consolidated Results Q3 Consolidated Revenue (1) Q3 Consolidated Adjusted EBITDA (1) $190.0 $25.0 $180.0 $170.0 $184.0 $20.0 $15.0 $21.2 $19.2 $160.0 $163.4 $10.0 $11.2 $150.0 $155.3 $5.0 $ $ Consolidated Revenue Breakout (2014 Full Year) Business Segment Customer Market Segment Gunite 24% Brillion Navistar Other 19% 14% A/M 25% Daimler 36% 13% Wheels 57% Other 55% Paccar 7% Volvo/Mack 11% Trailer 10% Class % 1) From continuing operations 18

19 Wheels & Gunite Segments Q3 Wheels Revenue Q3 Wheels Adjusted EBITDA $120.0 $24.0 $100.0 $80.0 $88.0 $106.7 $101.8 $22.0 $20.0 $21.0 $22.4 $60.0 $18.0 $40.0 $16.0 $17.0 $20.0 $14.0 $ $ Q3 Gunite Revenue Q3 Gunite Adjusted EBITDA $50.0 $8.0 $40.0 $40.8 $42.4 $43.8 $6.0 $4.0 $5.4 $6.5 $30.0 $2.0 $1.5 $ $

20 Brillion Segment Q3 Brillion Revenue Q3 Brillion Adjusted EBITDA $40.0 $4.0 $30.0 $35.0 $2.0 $2.8 $20.0 $26.5 $- $1.4 $10.0 $17.8 $(2.0) $(2.4) $ $(4.0)

21 $94.1 $88.3 $95.0 $79.6 $90.9 $96.1 $104.2 $71.3 $104.1 $108.9 $104.4 $82.6 $104.1 $105.1 $88.2 $58.9 $68.9 $69.0 $58.0 $43.2 $55.7 $53.7 $53.0 $42.9 $53.0 $46.4 $34.7 Trade Working Capital Q Working Capital Breakout Q Working Capital Breakout $66.5 $73.7 $59.9 $57.9 $45.8 $36.7 Trade A/R $ Net Inventory $ Trade A/P $ Trade A/R $ Net Inventory $ Trade A/P $ $120.0 $100.0 $80.0 $60.0 Historical Working Capital Requirements (1) 20.0% 15.0% 10.0% $40.0 $ % $- Q109 Q309 Q110 Q310 Q111 Q311 Q112 Q312 Q113 Q313 Q114 Q314 Q115 Q % Trade W/C Trade W/C % to Sales 1) Includes discontinued operations 21

22 Free Cash Flow QTD Period Ending Sept. 30th $ Millions Actual Actual Adjusted EBITDA $21.2 $19.2 Cash Interest Paid (15.1) (15.0) Cash Taxes Paid (0.2) (0.2) Excess Pension Contributions (3.9) (2.2) Change in Trade W/C Other (0.1) (0.1) Cash from Operations $5.6 $11.8 Capital Expenditures (6.0) (6.6) Free Cash Flow $(0.4) $5.2 22

23 2015 Outlook. 23

24 2015 Full Year Guidance Class 8 310K to 330K Class K to 225K Trailer 280K to 300K Brillion Revenue Growth Down by 25 to 30% Net Sales $675 to $700 Adjusted EBITDA $80 to $85 CAPEX $25 to $28 Depreciation & Amortization $43 Cash Interest Expense $32 Cash Taxes $3 Cash Pension Funding $8 to $10 Free Cash Flow $10 to $15 Change in guidance due to headwinds at Brillion 24

25 Summary Well-Positioned for First Profitable Year in Nearly 10 years - Fix & Grow Investments Yielding World-Class Operating Performance - Capable, Available Capacity to Handle Higher Volumes, Gain Share - Reduced Cost Structure & Expected Revenue Growth Driving Profitability - Making Adjustments at Brillion in Response to End Market Conditions - Focused on Revenue Growth and Margin Expansion at All Business Units - Continued Development and Commercialization of New Product Technology - Lightweight drum technology - Steel Armor protective coating Executing plans to achieve PROFITABLE GROWTH in Focused Well on PROFITABLE positioned for GROWTH another in strong year 25

26 Questions. 26

27 Appendix. 27

28 Segment Revenue Net Sales: Q3 $ Millions YOY Growth Wheels $106.7 $101.8 (4.5%) Gunite % Brillion Iron Works (49.2%) Corporate / Other Consolidated Total (11.2%) 28

29 Segment Operating Income Operating Income: Q3 $ Millions YOY Growth Wheels $11.8 $ % Gunite % Brillion Iron Works 1.7 (3.7) (317.3%) Corporate / Other (7.6) (7.6) (0.1%) Consolidated Total (25.4%) 29

30 Segment Adjusted EBITDA Adjusted EBITDA: Q3 $ Millions YOY Growth Wheels $21.0 $ % Gunite % Brillion Iron Works 2.8 (2.4) (187.4%) Corporate / Other (8.0) (7.3) (9.4%) Consolidated Total (9.5%) 30

31 Sales & Adjusted EBITDA % 250 Sales Adjusted EBITDA % To Sales 14.0% 12.0% % % % 4.0% % - 0.0% 31

32 Net Income to Adj. EBITDA Reconciliation QTD Period Ending June 30th $ Millions Actual Actual Net Income $1.1 $1.8 Income Tax Provision (Benefit) (0.4) (3.7) Net Interest Expense (Income) Depreciation and Amortization EBITDA $19.6 $16.9 Restructuring, Severance, Other Other Items Adjusted EBITDA $21.2 $19.2 We define Adjusted EBITDA as our net income or loss before income tax expense or benefit, interest expense, net, depreciation and amortization, restructuring, severance, and other charges, impairment, and currency losses, net. Adjusted EBITDA has been included because we believe that it is useful for us and our investors to measure our ability to provide cash flows to meet debt service. Adjusted EBITDA should not be considered an alternative to net income (loss) or other traditional indicators of operating performance and cash flows determined in accordance with accounting principles generally accepted in the United States ( GAAP ). We present the table of Adjusted EBITDA because covenants in the agreements governing our material indebtedness contain ratios based on this measure on a quarterly basis. While Adjusted EBITDA is used as a measure of liquidity and the ability to meet debt service requirements, it is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculations. 32

33 Net Debt & Liquidity Q32013 Q42013 Q12014 Q22014 Q32014 Q42014 Q12015 Q22015 Q32015 $ Millions Actual Actual Actual Actual Actual Actual Actual Actual Actual Senior Secured Notes $304.9 $305.2 $305.4 $305.7 $306.0 $306.2 $306.5 $306.8 $307.0 ABL Facility Gross Debt $339.9 $330.2 $340.4 $340.7 $331.0 $323.2 $326.5 $316.8 $322.0 Less Cash Net Debt $311.9 $296.8 $318.8 $308.8 $309.4 $293.5 $308.9 $285.9 $282.9 Debt to LTM Adjusted EBITDA Available Liquidity $62.4 $63.6 $62.9 $72.0 $69.6 $70.3 $70.9 $90.2 $

34 Trade Working Capital As of Sept 30th $ Millions Actual Actual Actual Actual Accounts Receivable $81.1 $60.4 $73.7 $57.9 Days Sales Outstanding Inventory Days Inventory Outstanding Accounts Payable Days Payables Outstanding Net Trade W/C $88.2 $58.0 $53.0 $34.7 Cash Conversion Cycle Days Percent to Annualized Sales 10.2% 8.8% 7.2% 5.3% Change from Prior Quarter $16.8 $11.0 $0.8 $11.7 Source (Use) of Cash 34