Metaldyne Performance Group Inc. Business Report FY ended Dec. 2014

Financial Overview

(in million USD)
FY ended Dec. 31, 2014 FY ended Dec. 31, 2013 Rate of change (%) Factors
Net Sales 2,717.0 2,017.3 34.7 1)
Operating Income 203.5 185.4 9.8 2)
Segment sales
HHI sales 977.6 916.5 6.7 3)
Metaldyne sales 1,177.5 1,112.0 5.9 4)
Grede sales 572.1 - N/A -

1) Net Sales
-The Company's net sales increased by 34.7% in the fiscal year ended December 31, 2014 to USD 2,717.0 million. The primary reason for this increase is the addition of the Grede segment due to acquisition of Grede in June 2014, thus increasing sales by USD 572.1 million. Higher vehicle production numbers and new program launches also increased sales.

2) Operating Income
-Operating income increased by 9.8% over the previous year to USD 203.5 million for the fiscal year ended December 31, 2014. An increase in gross profit of USD 114.3 million was the main factor for the growth in operating income. The increase was partially offset by goodwill impairment by the Company's KBI wheel bearing reporting unit, increased stock-based compensation expenses, increased professional fees, and costs and adjustments due to the acquisition of Grede.

3) HHI sales
-Sales for the Company's HHI segment increased by 6.7% in the fiscal year ended December 31, 2014 to USD 977.6 million. The increase in sales was caused by increased production levels in North America for light vehicles, new programs, higher raw material surcharges and increased customer prices.

4) Metaldyne sales
-The Company's Metaldyne segment had sales of USD 1,177.5 million in the fiscal year ended December 31, 2014, an increase of 5.9% from the previous year. Higher light vehicle production levels in North America and Europe, new programs, favorable currency exchange rates, and higher raw material surcharges all increased net sales. This was partially offset by overall decreases in customer prices.


Merger to form Metaldyne Performance Group, Inc.
-The Company announced the merger of three automotive suppliers, Grede Holdings LLC, HHI Group Holdings, and Metaldyne LLC, to form a new holding company. As a result of the merger, the Company will become a premiere manufacturing company with operations in metal forming technologies and global capabilities focused on transmission, engine, driveline, and safety critical applications in passenger, commercial and industrial vehicles. Grede, HHI and Metaldyne will continue to operate as business units within the Company. The three operating companies are majority owned by an affiliate of American Securities LLC, a U.S. private equity firm. (From a press release on August 4, 2014)


-The Company's Grede segment supplies a number of components for the Chevrolet "Silverado", the 2014 North American Truck of the Year. These components consist of the brake anchor and calipers, bearing caps, upper and lower control arms, differential carrier and case, engine bracket, front steering knuckle, spacer, and tension struts. In addition, Grede also provides leaf spring support brackets using a high-strength ductile iron alloy called SiboDur. (From a press release on March 11, 2014 and February 18, 2014)


-Metaldyne GmbH & Co. KG, a subsidiary of the Company, was one of six companies which received the ZF Supplier Award 2014 from ZF Friedrichshafen AG. (From a press release on November 26, 2014)

-The Company announced that its Metaldyne plant in Ramos Arizpe, Mexico, has received the General Motors Supplier Quality Excellence Award for the second time. The plant shipped over 1.3 million machined connecting rods to GM plants in four countries between July 2013 and June 2014. The facility also machines connecting rods for other world class customers such as Chrysler, Yamaha, Opel, Ford and Fiat, supplying high quality products to their locations worldwide. (From a press release on September 26, 2014)

-The Company announced that its Metaldyne facility in Valencia, Spain received special recognition from Ford for outstanding quality. For 11 consecutive years, Metaldyne Sintered Components Espana, S.L has delivered several million forged powder metal connecting rods for certain Ford Duratec engine lines in Europe with zero parts per million in defects and 100% on-time delivery. (From a press release on June 23, 2014)

-The Company's Metaldyne, LLC subsidiary was named a GM Supplier of the Year for 2013. This was the first time that Metaldyne received this honor from GM. (From a press release on April 7, 2014)

R&D Activities

-The Company does not generally incur significant R&D costs as it tends to be responsible for the manufacturing of products. The Company's customers are responsible for the design and function of the products, and thus research and development costs are typically incurred by the customer.

Technological Alliance

-Metaldyne, LLC and Stackpole International's Engineered Products Division have agreed to share technology under a technical agreement to allow both companies to expand their product offerings in line with engine fuel efficiency trends. With this technical alliance, Metaldyne and Stackpole will work together to design balance shaft assembly systems for the light vehicle engine market. These systems will be based on Metaldyne's balance shaft system technology combined with Stackpole's variable displacement oil pump technology. (From a press release on August 19, 2014)

Product Development

-The Company's Grede segment is developing chassis, powertrain and drivetrain components using a new ductile iron alloy called SiboDur. SiboDur provides weight reduction characteristics that are comparable to aluminum and has cost, fatigue life and manufacturability advantages compared to austempered ductile iron and forged steel. Grede has SiboDur production and prototyping business at its facilities in Reedsburg, Wisconsin, U.S., and St. Cloud, Minnesota, U.S. (From a press release on March 25, 2014)

Capital Expenditure

(in million USD)
FY ended Dec. 31, 2014 FY ended Dec. 31, 2013
HHI 61.6 45.1
Metaldyne 70.5 77.2
Grede 24.3 -
Total 156.4 122.3