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**UNITED STATES SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, DC  20549**

 

**FORM 10-Q**

 

**(Mark One)**

 
| **x** | ** ** | **Quarterly   Report Pursuant to Section 13 or 15 (d) of the Securities Exchange   Act of 1934** |
|-------|------------|------------------------------------------------------------------------------------------------------------|

 

**For the quarterly period ended March 31, 2011.**

 

**OR**

** **
| **o** | ** ** | **Transition****Report Pursuant to Section 13 or 15(d) of the Securities   Exchange Act of 1934** |
|-------|------------|-------------------------------------------------------------------------------------------------------------|

 

**For the transition period from                      to                       .**

 

**Commission file number 001-32483**

 

**ACCURIDE CORPORATION**

(Exact Name of Registrant as Specified in Its Charter)

 

| **Delaware**                    | ** ** | **61-1109077**                       |
|---------------------------------|------------|--------------------------------------|
| (State or Other Jurisdiction of |       | (I.R.S. Employer Identification No.) |
| Incorporation or Organization)  |       |                                 |

 

| **7140   Office Circle, Evansville, IN** | ** ** | **47715**  |
|-----------------------------------------------|------------|------------|
| (Address of Principal Executive Offices)      |       | (Zip Code) |

 

Registrant’s Telephone Number, Including Area Code: **(812) 962-5000**

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x No o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes o  No o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

| Large Accelerated Filer o |   | Accelerated Filer x         |
|--------------------------------|--------|-----------------------------|
|                           |   |                        |
| Non-Accelerated Filer o   |   | Smaller Reporting Company o |

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  o No x

 

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes  x No o

 

As of May 5, 2011, 47,251,362 shares of Accuride Corporation common stock, par value $.01 per share, were outstanding.

 

 

 

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**ACCURIDE CORPORATION**

 

**Table of Contents**

** **
| ** **                                                  | ** **                                                                                   | **Page**   |
|-------------------------------------------------------------|----------------------------------------------------------------------------------------------|------------|
| ** **                                                  | ** **                                                                                   | ** ** |
| **PART I — FINANCIAL INFORMATION** | ** **                                                                                   |
|                                                        |                                                                                         |       |
| Item 1.                                                     | Condensed Consolidated   Financial Statements (Unaudited)                                    |       |
|                                                        |                                                                                         |       |
|                                                        | Condensed Consolidated Balance Sheets                                                        | 3          |
|                                                        |                                                                                         |       |
|                                                        | Condensed Consolidated Statements of Operations                                              | 4          |
|                                                        |                                                                                         |       |
|                                                        | Condensed Consolidated Statements of Cash Flows                                              | 5          |
|                                                        |                                                                                         |       |
|                                                        | Notes to Condensed Consolidated Financial Statements                                         | 6          |
|                                                        |                                                                                         |       |
| Item 2.                                                     | Management’s   Discussion and Analysis of Financial Condition and Results of Operations | 17         |
|                                                        |                                                                                         |       |
| Item 3.                                                     | Quantitative   and Qualitative Disclosures About Market Risk                                 | 23         |
|                                                        |                                                                                         |       |
| Item 4.                                                     | Controls and   Procedures                                                                    | 23         |
|                                                        |                                                                                         |       |
| **PART II   — OTHER INFORMATION**                 |                                                                                         |
| ** **                                                  |                                                                                         |
| Item 1.                                                     | Legal Proceedings                                                                            | 24         |
|                                                        |                                                                                         |       |
| Item   6.                                                   | Exhibits                                                                                     | 25         |
|                                                        |                                                                                         |       |
| Signatures                                                  |                                                                                         | 26         |

 

**Explanatory Note:**

 

Effective November 18, 2010, Accuride Corporation implemented a one-for-ten reverse stock split of its Common Stock.  Unless otherwise indicated, all share amounts and per share data for the Successor Company have been adjusted to reflect this reverse stock split.  See Note 1 of the consolidated financial statements.

 

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**Part I.  FINANCIAL INFORMATION**

 

**Item 1.  Financial Statements**

 

**ACCURIDE CORPORATION AND SUBSIDIARIES**

**CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)**

 
| ** **                                                                                                                                                                                                                 | ** ** | **March 31,** | ** ** | **December 31,** | ** ** |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------|------------|-----------------------|------------|
| **(In thousands, except for share and per share data)**                                                                                                                            | ** ** | **2011**           | ** ** | **2010**              | ** ** |
| **ASSETS**                                                                                                                                                                                                                 |       |               |       |                  |       |
| CURRENT ASSETS:                                                                                                                                                                                                            |       |               |       |                  |       |
| Cash and cash equivalents                                                                                                                                                                                                  |       | $                  | 31,740     |                  | $          | 78,466 |   |
| Customer receivables, net of allowance for   doubtful accounts of $1,257 and $1,640 in 2011 and 2010, respectively                                                                                                         |       | 104,208            |       | 70,760                |       |
| Other receivables                                                                                                                                                                                                          |       | 8,225              |       | 4,942                 |       |
| Inventories                                                                                                                                                                                                                |       | 64,717             |       | 55,818                |       |
| Deferred income taxes                                                                                                                                                                                                      |       | 13,061             |       | 13,061                |       |
| Income tax receivable                                                                                                                                                                                                      |       | 1,025              |       | 1,097                 |       |
| Prepaid expenses and other current assets                                                                                                                                                                                  |       | 6,771              |       | 4,360                 |       |
| Total current assets                                                                                                                                                                                                       |       | 229,747            |       | 228,504               |       |
| PROPERTY, PLANT AND EQUIPMENT, net                                                                                                                                                                                         |       | 234,082            |       | 241,052               |       |
| OTHER ASSETS:                                                                                                                                                                                                              |       |               |       |                  |       |
| Goodwill                                                                                                                                                                                                                   |       | 177,572            |       | 177,572               |       |
| Other intangible assets, net                                                                                                                                                                                               |       | 208,011            |       | 212,656               |       |
| Deferred financing costs, net of accumulated   amortization of $1,139 and $711 in 2011 and 2010, respectively                                                                                                              |       | 9,729              |       | 10,157                |       |
| Other                                                                                                                                                                                                                      |       | 5,924              |       | 4,109                 |       |
| TOTAL                                                                                                                                                                                                                      |       | $                  | 865,065    |                  | $          | 874,050 |   |
| **LIABILITIES AND STOCKHOLDERS’   EQUITY**                                                                                                                                                                            |       |               |       |                  |       |
| CURRENT LIABILITIES:                                                                                                                                                                                                       |       |               |       |                  |       |
| Accounts payable                                                                                                                                                                                                           |       | $                  | 64,869     |                  | $          | 55,324 |   |
| Accrued payroll and compensation                                                                                                                                                                                           |       | 16,295             |       | 17,320                |       |
| Accrued interest payable                                                                                                                                                                                                   |       | 5,083              |       | 12,682                |       |
| Accrued workers compensation                                                                                                                                                                                               |       | 6,203              |       | 6,994                 |       |
| Accrued and other liabilities                                                                                                                                                                                              |       | 20,938             |       | 20,200                |       |
| Total current liabilities                                                                                                                                                                                                  |       | 113,388            |       | 112,520               |       |
| LONG-TERM DEBT                                                                                                                                                                                                             |       | 302,293            |       | 302,031               |       |
| DEFERRED INCOME TAXES                                                                                                                                                                                                      |       | 32,652             |       | 32,937                |       |
| NON-CURRENT INCOME TAXES PAYABLE                                                                                                                                                                                           |       | 7,683              |       | 7,683                 |       |
| OTHER POSTRETIREMENT BENEFIT PLAN LIABILITY                                                                                                                                                                                |       | 76,244             |       | 75,767                |       |
| PENSION BENEFIT PLAN LIABILITY                                                                                                                                                                                             |       | 33,604             |       | 37,194                |       |
| OTHER LIABILITIES                                                                                                                                                                                                          |       | 5,800              |       | 7,819                 |       |
| COMMITMENTS AND CONTINGENCIES (Note 6)                                                                                                                                                                                     |       | —             |       | —                |       |
| STOCKHOLDERS’ EQUITY:                                                                                                                                                                                                 |       |               |       |                  |       |
| Preferred Stock, $0.01 par value; 10,000,000   shares authorized                                                                                                                                                           |       | —             |       | —                |       |
| Common Stock, $0.01 par value; 80,000,000 shares   authorized, 47,251,362 and 47,229,627 shares issued and outstanding at   March 31, 2011 and December 31, 2010, respectively, and additional   paid-in-capital |       | 433,774            |       | 433,192               |       |
| Accumulated other comprehensive loss                                                                                                                                                                                       |       | (8,680             | )          | (8,561                | )          |
| Accumulated deficiency                                                                                                                                                                                                     |       | (131,693           | )          | (126,532              | )          |
| Total stockholders’ equity                                                                                                                                                                                            |       | 293,401            |       | 298,099               |       |
| TOTAL                                                                                                                                                                                                                      |       | $                  | 865,065    |                  | $          | 874,050 |   |

 

See notes to unaudited condensed consolidated financial statements.

 

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**ACCURIDE CORPORATION AND SUBSIDIARIES**

**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)**

 
| ** **                                                        | ** ** | **Successor**                                     | ** ** | ** **                                                       | **Predecessor** | ** ** |
|-------------------------------------------------------------------|------------|---------------------------------------------------|------------|------------------------------------------------------------------|-----------------|------------|
| ** **                                                        | ** ** | **Three Months   Ended March 31,** | ** ** | **Period from   February 26 to   March 31,** | ** **      | ** ** | **Period from   January 1 to   February 26,** | ** ** |
| **(In thousands except per share data)**                          | ** ** | **2011**                                          | ** ** | **2010**                                                         | ** **      | ** ** | **2010** | ** ** |
| ** **                                                        | ** ** | ** **                                        | ** ** | ** **                                                       | ** **      | ** ** | ** ** | ** ** |
| NET SALES                                                         |       | $                                                 | 218,839    |                                                             | $               | 64,914     |   |   | $ | 104,059 |   |
| COST OF GOODS SOLD                                                |       | 200,380                                           |       | 59,314                                                           |            |       | 99,577 |   |
| GROSS PROFIT                                                      |       | 18,459                                            |       | 5,600                                                            |            |       | 4,482 |   |
| OPERATING EXPENSES:                                               |       |                                              |       |                                                             |            |       |   |   |
| Selling, general and administrative                               |       | 16,784                                            |       | 4,366                                                            |            |       | 7,595 |   |
| INCOME (LOSS) FROM OPERATIONS                                     |       | 1,675                                             |       | 1,234                                                            |            |       | (3,113 | ) |
| OTHER INCOME (EXPENSE):                                           |       |                                              |       |                                                             |            |       |   |   |
| Interest income                                                   |       | 39                                                |       | 12                                                               |            |       | 54 |   |
| Interest expense                                                  |       | (8,379                                            | )          | (3,505                                                           | )               |       | (7,550 | ) |
| Unrealized loss on mark to market valuation of   convertible debt |       | —                                            |       | (50,601                                                          | )               |       | — |   |
| Other income (loss), net                                          |       | 2,004                                             |       | (326                                                             | )               |       | 566 |   |
| LOSS BEFORE REORGANIZATION ITEMS AND INCOME TAXES                 |       | (4,661                                            | )          | (53,186                                                          | )               |       | (10,043 | ) |
| Reorganization income                                             |       | —                                            |       | —                                                           |            |       | (59,311 | ) |
| INCOME (LOSS) BEFORE INCOME TAXES                                 |       | (4,661                                            | )          | (53,186                                                          | )               |       | 49,268 |   |
| INCOME TAX PROVISION (BENEFIT)                                    |       | 500                                               |       | (158                                                             | )               |       | (1,534 | ) |
| NET INCOME (LOSS)                                                 |       | $                                                 | (5,161     | )                                                                | $               | (53,028    | ) |   | $ | 50,802 |   |
| Weighted average common shares outstanding—basic             |       | 47,237                                            |       | 12,629                                                           |            |       | 47,572 |   |
| Basic income (loss) per share                                     |       | $                                                 | (0.11      | )                                                                | $               | (4.20      | ) |   | $ | 1.07 |   |
| Weighted average common shares outstanding—diluted           |       | 47,237                                            |       | 12,629                                                           |            |       | 47,572 |   |
| Diluted income (loss) per share                                   |       | $                                                 | (0.11      | )                                                                | $               | (4.20      | ) |   | $ | 1.07 |   |

 

See notes to unaudited condensed consolidated financial statements.

 

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**ACCURIDE CORPORATION AND SUBSIDIARIES**

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)**

 
| ** **                                                                                  | ** ** | **Successor**                                     | ** ** | ** **                                                       | **Predecessor** | ** ** |
|---------------------------------------------------------------------------------------------|------------|---------------------------------------------------|------------|------------------------------------------------------------------|-----------------|------------|
| ** **                                                                                  | ** ** | **Three Months   Ended March 31,** | ** ** | **Period from   February 26 to   March 31,** | ** **      | ** ** | **Period from   January 1 to   February 26,** | ** ** |
| **(In thousands)**                                                                     | ** ** | **2011**                                          | ** ** | **2010**                                                         | ** **      | ** ** | **2010** | ** ** |
| ** **                                                                                  | ** ** | ** **                                        | ** ** | ** **                                                       | ** **      | ** ** | ** ** | ** ** |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                                       |       |                                              |       |                                                             |            |       |   |   |
| Net income (loss)                                                                           |       | $                                                 | (5,161     | )                                                                | $               | (53,028    | ) |   | $ | 50,802 |   |
| Adjustments to reconcile net loss to net cash   provided by (used in) operating activities: |       |                                              |       |                                                             |            |       |   |   |
| Depreciation and impairment of property, plant and   equipment                              |       | 10,262                                            |       | 3,185                                                            |            |       | 6,711 |   |
| Amortization — deferred financing costs                                                |       | 690                                               |       | —                                                           |            |       | 694 |   |
| Amortization — other intangible assets                                                 |       | 3,921                                             |       | 960                                                              |            |       | 821 |   |
| Reorganization items                                                                        |       | —                                            |       | —                                                           |            |       | (59,311 | ) |
| Payments on reorganization items                                                            |       | —                                            |       | (7,091                                                           | )               |       | (12,164 | ) |
| Loss on disposal of assets                                                                  |       | 28                                                |       | 20                                                               |            |       | 3 |   |
| Provision for deferred income taxes                                                         |       | —                                            |       | (158                                                             | )               |       | (1,560 | ) |
| Non-cash stock-based compensation                                                           |       | 582                                               |       | —                                                           |            |       | — |   |
| Non-cash change in market valuation - convertible   notes                                   |       | —                                            |       | 50,601                                                           |            |       | — |   |
| Change in warrant liability                                                                 |       | (1,985                                            | )          | —                                                           |            |       | — |   |
| Paid-in-kind interest                                                                       |       | —                                            |       | 875                                                              |            |       | 1,769 |   |
| Changes in certain assets and liabilities:                                                  |       |                                              |       |                                                             |            |       |   |   |
| Receivables                                                                                 |       | (40,862                                           | )          | (8,571                                                           | )               |       | (15,833 | ) |
| Inventories                                                                                 |       | (11,174                                           | )          | (1,629                                                           | )               |       | (5,736 | ) |
| Prepaid expenses and other assets                                                           |       | (3,703                                            | )          | (2,085                                                           | )               |       | 1,051 |   |
| Accounts payable                                                                            |       | 17,244                                            |       | (10,617                                                          | )               |       | 12,931 |   |
| Accrued and other liabilities                                                               |       | (10,533                                           | )          | 5,864                                                            |            |       | (951 | ) |
| Net cash used in operating activities                                                       |       | (40,691                                           | )          | (21,674                                                          | )               |       | (20,773 | ) |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                                       |       |                                              |       |                                                             |            |       |   |   |
| Purchases of property, plant and equipment                                                  |       | (13,820                                           | )          | (1,809                                                           | )               |       | (1,457 | ) |
| Proceeds from sale of property, plant and   equipment                                       |       | 7,785                                             |       | —                                                           |            |       | — |   |
| Other                                                                                       |       | —                                            |       | 65                                                               |            |       | (555 | ) |
| Net cash used in investing activities                                                       |       | (6,035                                            | )          | (1,744                                                           | )               |       | (2,012 | ) |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                                       |       |                                              |       |                                                             |            |       |   |   |
| Proceeds from postpetition senior credit facility                                           |       | —                                            |       | —                                                           |            |       | 309,019 |   |
| Payment of prepetition senior credit facility                                               |       | —                                            |       | —                                                           |            |       | (305,814 | ) |
| Proceeds from convertible notes                                                             |       | —                                            |       | —                                                           |            |       | 140,000 |   |
| Payment of debtor-in-possession borrowing                                                   |       | —                                            |       | —                                                           |            |       | (25,000 | ) |
| Payment of revolving credit facility                                                        |       | —                                            |       | —                                                           |            |       | (71,659 | ) |
| Other                                                                                       |       | —                                            |       | (66                                                              | )               |       | 65 |   |
| Net cash provided by (used in) financing   activities                                       |       | —                                            |       | (66                                                              | )               |       | 46,611 |   |
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                            |       | (46,726                                           | )          | (23,484                                                          | )               |       | 23,826 |   |
| CASH AND CASH EQUIVALENTS—Beginning of period                                          |       | 78,466                                            |       | 80,347                                                           |            |       | 56,521 |   |
| CASH AND CASH EQUIVALENTS—End of period                                                |       | $                                                 | 31,740     |                                                             | $               | 56,863     |   |   | $ | 80,347 |   |
|                                                                                        |       |                                              |       |                                                             |            |       |   |   |
| Supplemental cash flow information:                                                         |       |                                              |       |                                                             |            |       |   |   |
| Cash paid for interest                                                                      |       | $                                                 | 15,243     |                                                             | $               | 2,720      |   |   | $ | 9,393 |   |
| Cash paid (received) for income taxes                                                       |       | 434                                               |       | (389                                                             | )               |       | (826 | ) |
| Non-cash transactions:                                                                      |       |                                              |       |                                                             |            |       |   |   |
| Purchases of property, plant and equipment in   accounts payable                            |       | $                                                 | 1,246      |                                                             | $               | 510        |   |   | $ | — |   |
| Issuance of warrants                                                                        |       | —                                            |       | —                                                           |            |       | 6,618 |   |

 

See notes to unaudited condensed consolidated financial statements.

 

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**ACCURIDE CORPORATION**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

**(AMOUNTS IN THOUSANDS, UNLESS OTHERWISE NOTED, EXCEPT SHARE AND PER SHARE DATA)**

** **

**Note 1 - Summary of Significant Accounting Policies**

 

***Basis of Presentation*****— The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, except that the unaudited condensed consolidated financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.  However, in the opinion of Accuride Corporation (“Accuride” or the “Company”), all adjustments (consisting of normal recurring accruals) considered necessary to present fairly the condensed consolidated financial statements have been included.

 

The results of operations for the three months ended March 31, 2011 are not necessarily indicative of the results to be expected for the year ending December 31, 2011.  The unaudited consolidated financial statements and notes thereto should be read in conjunction with the audited condensed consolidated financial statements and notes thereto disclosed in Accuride’s Annual Report on Form 10-K for the year ended December 31, 2010.

 

On January 31, 2011, substantially all of the assets and business of our Bostrom Seating subsidiary were sold to a subsidiary of Commercial Vehicle Group, Inc. for approximately $8.8 million and resulted in recognition of a $0.2 million loss on our consolidated statement of operations in the three months ended March 31, 2011.

 

***Chapter 11 Proceedings —***On October 8, 2009, Accuride and its domestic subsidiaries filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code with the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”).  Prior to filing for bankruptcy, we were in default under our prepetition senior credit facility and the indenture governing our prepetition senior subordinated notes due to our failure to comply with certain financial covenants in the prepetition senior credit facility and to make the $11.7 million interest payment due August 3, 2009 on our prepetition senior subordinated notes.  On October 7, 2009, we entered into restructuring support agreements with the holders of approximately 57% of the principal amount of the loans outstanding under our prepetition senior credit facility and the holders of approximately 70% of the principal amount of our prepetition senior subordinated notes, pursuant to which the parties agreed to support a financial reorganization of the Company and its domestic subsidiaries consistent with the terms set forth therein.

 

On November 18, 2009, we filed our Joint Plan of Reorganization and the related Disclosure Statement with the Bankruptcy Court.  All classes of creditors entitled to vote voted to approve the Plan of Reorganization.  A confirmation hearing for the Plan of Reorganization was held beginning on February 17, 2010.  At the confirmation hearing, we and all of our constituents reached a settlement to fully resolve all disputes related to the Plan of Reorganization and all of our key constituents agreed to support the Plan of Reorganization.  On February 18, 2010, the Bankruptcy Court entered an order confirming the Third Amended Joint Plan of Reorganization, which approved and confirmed the Plan of Reorganization, as modified by the confirmation order.  On February 26, 2010 (the “Effective Date”), the Plan of Reorganization became effective and we emerged from Chapter 11 bankruptcy proceedings. During the pendency of the bankruptcy, we operated our business as debtors-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code.

 

***Financial Statement Presentation***

 

We have prepared the accompanying consolidated financial statements in accordance with Accounting Standards Codification (“ASC”) 852, *Reorganizations*.  ASC 852 requires that the financial statements for the periods subsequent to a Chapter 11 filing separate transactions and events that are directly associated with the reorganization from the ongoing operations of the business.  Accordingly, all transactions (including, but not limited to, all professional fees, realized gains and losses and provisions for losses) directly associated with the reorganization of the business are reported separately in the financial statements as reorganization items, net.  The Predecessor Company recognized the following reorganization income (expense) in our financial statements:

 

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| ** **                                                    | ** ** | **Predecessor**                                                   | ** ** |
|---------------------------------------------------------------|------------|-------------------------------------------------------------------|------------|
| ** **                                                    | ** ** | **Period from   January 1 to   February 26,** | ** ** |
| **(In thousands)**                                       | ** ** | **2010**                                                          | ** ** |
| ** **                                                    | ** ** | ** **                                                        | ** ** |
| Debt discharge — Senior subordinate notes and   interest |       | $                                                                 | 252,798    |   |
| Market valuation of $140 million Convertible Notes            |       | (155,094                                                          | )          |
| Professional fees                                             |       | (25,030                                                           | )          |
| Market valuation of warrants issued                           |       | (6,618                                                            | )          |
| Deferred financing fees                                       |       | (3,847                                                            | )          |
| Term facility discount                                        |       | (2,974                                                            | )          |
| Other                                                         |       | 76                                                                |       |
| Total                                                         |       | $                                                                 | 59,311     |   |

 

***Fresh-Start Reporting***

 

Upon our emergence from Chapter 11 bankruptcy proceedings, we adopted fresh-start accounting in accordance with the provisions of ASC 852, pursuant to which the midpoint of the range of our reorganization value of $563 million was allocated to our assets and liabilities in conformity with the procedures specified by ASC 805, *Business Combinations*.  We adopted fresh-start accounting for all of subsidiaries, although our foreign subsidiaries did not file for bankruptcy protection in their jurisdictions.

 

As a result of the adoption of fresh-start reporting, our consolidated balance sheets and consolidated statements of operations subsequent to February 26, 2010, will not be comparable in many respects to our consolidated balance sheets and consolidated statements of operations prior to February 26, 2010.  References to “Successor Company” refer to the Company after February 26, 2010, after giving effect to the application of fresh-start reporting.  References to “Predecessor Company” refer to the Company on or prior to February 26, 2010.

 

***Management’s Estimates and Assumptions*****— The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

 

***Reverse Stock Split*******—Effective November 18, 2010, Accuride Corporation implemented a one-for-ten reverse stock split of its Common Stock.  Unless otherwise indicated, all share amounts and per share data for the Successor Company have been adjusted to reflect this reverse stock split.

 

***Earnings Per Common Share*** — Basic and diluted earnings per common share were computed as follows:

 
| ** **                                                        | ** ** | **Successor**                                     | ** ** | ** **                                                       | **Predecessor** | ** ** |
|-------------------------------------------------------------------|------------|---------------------------------------------------|------------|------------------------------------------------------------------|-----------------|------------|
| ** **                                                        | ** ** | **Three Months   Ended March 31,** | ** ** | **Period from   February 26 to   March 31,** | ** **      | ** ** | **Period from   January 1 to   February 26,** | ** ** |
| **(In thousands except per share data)** | ** ** | **2011**                                          | ** ** | **2010**                                                         | ** **      | ** ** | **2010** | ** ** |
| ** **                                                        | ** ** | ** **                                        | ** ** | ** **                                                       | ** **      | ** ** | ** ** | ** ** |
| Numerator:                                                        | ** ** | ** **                                        | ** ** | ** **                                                       | ** **      | ** ** | ** ** | ** ** |
| Net income (loss)                                                 |       | $                                                 | (5,161     | )                                                                | $               | (53,028    | ) |   | $ | 50,802 |   |
| Denominator:                                                      |       |                                              |       |                                                             |            |       |   |   |
| Weighted average shares outstanding — Basic                  |       | 47,237                                            |       | 12,629                                                           |            |       | 47,572 |   |
| Effect of dilutive share-based awards                             |       | —                                            |       | —                                                           |            |       | — |   |
| Weighted average shares outstanding - Diluted                     |       | 47,237                                            |       | 12,629                                                           |            |       | 47,572 |   |
|                                                              |       |                                              |       |                                                             |            |       |   |   |
| Basic income (loss) per common share                              |       | $                                                 | (0.11      | )                                                                | $               | (4.20      | ) |   | $ | 1.07 |   |
| Diluted income (loss) per common share                            |       | $                                                 | (0.11      | )                                                                | $               | (4.20      | ) |   | $ | 1.07 |   |

 

As of March 31, 2011 and March 31, 2010, there were warrants exercisable for 2,205,882 shares that were not included in the computation of diluted earnings per share because the effect would be anti-dilutive.

 

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***Stock-Based Compensation***—Compensation expense for share-based compensation programs of $0.6 million was recognized in the three months ended March 31, 2011.  As of March 31, 2011, there was approximately $2.3 million of unrecognized pre-tax compensation expense related to share-based awards not yet vested that will be recognized over a weighted-average period of 0.9 years.

 

***Income Tax***—Under Accounting Principles Board Opinion No. 28, *Interim Financial Reporting*, we compute on a quarterly basis an estimated annual effective tax rate considering ordinary income and related income tax expense. Ordinary income refers to income (loss) before income tax expense excluding significant, unusual, or infrequently occurring items. The tax effect of an unusual or infrequently occurring item is recorded in the interim period in which it occurs. Other items included in income tax expense in the periods in which they occur include the cumulative effect of changes in tax laws or rates, foreign exchange gains and losses, adjustments to uncertain tax positions, and adjustments to our valuation allowance due to changes in judgment in the realizability of deferred tax assets in future years.

 

We have assessed the need to maintain a valuation allowance for deferred tax assets based on an assessment of whether it is more likely than not that deferred tax benefits will be realized through the generation of future taxable income. Appropriate consideration is given to all available evidence, both positive and negative, in assessing the need for a valuation allowance. Due to our recent history of U.S. operating and taxable losses, the inconsistency of these profits, and the uncertainty of our financial outlook, we continue to maintain a full valuation allowance against our domestic deferred tax assets.

 

***Recent Accounting Adoptions***

 

In January 2010, the FASB issued ASU 2010-6, *Improving Disclosures about Fair Value Measurements*, which requires interim disclosures regarding significant transfers in and out of Level 1 and Level 2 fair value measurements. Additionally, this ASU requires disclosure for each class of assets and liabilities and disclosures about the valuation techniques and inputs used to measure fair value for both recurring and non-recurring fair value measurements. These disclosures are required for fair value measurements that fall in either Level 2 or Level 3. Further, the ASU requires separate presentation of Level 3 activity for the fair value measurements.  The adoption of this guidance did not have a material impact on our consolidated financial statements.

 

In December 2010, the FASB issued ASU 2010-28, *When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts*.  The amendments in this update modify Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. In determining whether it is more likely than not that a goodwill impairment exists, an entity should consider whether there are any adverse qualitative factors indicating that an impairment may exist. The qualitative factors are consistent with the existing guidance and examples in paragraph ASC 350-20-35-30, which requires that goodwill of a reporting unit be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.  This update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2010.  The adoption of this guidance did not have a material impact on our consolidated financial statements.

 

**Note 2 - Inventories**

 

Inventories at March 31, 2011 and December 31, 2010, on a FIFO basis, were as follows:

 

 
| ** **                  | ** ** | **March 31, 2011** | ** ** | **December 31, 2010** | ** ** |
|-----------------------------|------------|------------------------------|------------|---------------------------------|------------|
| Raw materials               |       | $                            | 18,205     |                            | $          | 15,447 |   |
| Work in process             |       | 19,619                       |       | 14,096                          |       |
| Finished manufactured goods |       | 26,893                       |       | 26,275                          |       |
| Total inventories           |       | $                            | 64,717     |                            | $          | 55,818 |   |

 

**Note 3 - Goodwill and Other Intangible Assets**

 

Goodwill and any indefinite-lived intangible assets are assessed for impairment annually or more frequently if circumstances indicate impairment may have occurred.  The analysis of potential impairment of goodwill requires a two-step approach.  The first step is the estimation of fair value of each reporting unit.  If step one indicates that impairment potentially exists, the second step is performed to measure the amount of impairment, if any.  Goodwill impairment exists when the implied fair value of goodwill is less than its carrying value.

 

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The following represents the carrying amount of goodwill, on a reportable segment basis, as of January 1, 2011 and March 31, 2011:

 
| ** **                         | ** ** | **Wheels** | ** ** | **Components** | ** ** | **Other** | ** ** | **Total** | ** ** |
|------------------------------------|------------|------------|------------|----------------|------------|-----------|------------|-----------|------------|
| Balance as of January 1, 2011 |       | $          | 97,127     |           | $          | 67,253    |       | $         | 13,192     |   | $ | 177,572 |   |
| Balance as of March 31, 2011  |       | $          | 97,127     |           | $          | 67,253    |       | $         | 13,192     |   | $ | 177,572 |   |

 

The changes in the carrying amount of other intangible assets for the period January 1, 2011 to March 31, 2011 by reportable segment, are as follows:

 
| ** **                         | ** ** | **Wheels** | ** ** | **Components** | ** ** | **Other** | ** ** | **Corporate** | ** ** | **Total** | ** ** |
|------------------------------------|------------|------------|------------|----------------|------------|-----------|------------|---------------|------------|-----------|------------|
| Balance as of January 1, 2011 |       | $          | 143,728    |           | $          | 45,618    |       | $             | 23,310     |      | $          | — |   | $ | 212,656 |   |
| Additions                          |       | —     |       | —         |       | —    |       | 308           |       | 308       |       |
| Sale of assets                     |       | —     |       | (1,032         | )          | —    |       | —        |       | (1,032    | )          |
| Amortization                       |       | (2,694     | )          | (847           | )          | (354      | )          | (26           | )          | (3,921    | )          |
| Balance as of March 31, 2011  |       | $          | 141,034    |           | $          | 43,739    |       | $             | 22,956     |      | $          | 282 |   | $ | 208,011 |   |

 

The summary of goodwill and other intangible assets is as follows:

 
| ** **               | ** ** | **Weighted   Average** | ** ** | **As of March 31, 2011** | ** ** | **As of December 31, 2010** | ** ** |
|--------------------------|------------|------------------------|------------|----------------------------------------------|------------|-------------------------------------------------|------------|
| ** **               | ** ** | **Useful   Lives**     | ** ** | **Gross   Amount**                           | ** ** | **Accumulated   Amortization**                  | ** ** | **Carrying   Amount** | ** ** | **Gross   Amount** | ** ** | **Accumulated   Amortization** | ** ** | **Carrying   Amount** | ** ** |
| Goodwill                 |       | —                 |       | $                                            | 177,572    |                                            | $          | — |   | $ | 177,572 |   | $ | 177,572 |   | $ | — |   | $ | 177,572 |   |
| Other intangible assets: |       |                   |       |                                         |       |                                            |       |   |   |   |   |   |   |   |   |
| Non-compete agreements   |       | 2.0                    |       | $                                            | 308        |                                            | $          | 26 |   | $ | 282 |   | $ | — |   | $ | — |   | $ | — |   |
| Trade names              |       | —                 |       | 34,100                                       |       | —                                          |       | 34,100 |   | 34,100 |   | — |   | 34,100 |   |
| Technology               |       | 10.0                   |       | 38,986                                       |       | 4,299                                           |       | 34,687 |   | 40,018 |   | 2,240 |   | 37,778 |   |
| Customer relationships   |       | 20.0                   |       | 146,994                                      |       | 8,052                                           |       | 138,942 |   | 146,994 |   | 6,216 |   | 140,778 |   |
|                     |       |                   |       | $                                            | 220,388    |                                            | $          | 12,377 |   | $ | 208,011 |   | $ | 221,112 |   | $ | 8,456 |   | $ | 212,656 |   |

 

We estimate that our amortization expense for our other intangible assets for 2011 through 2015 will be approximately $12.5 million for 2011 and $11.3 million for each year from 2012 through 2015.

 

**Note 4 - Comprehensive income (loss)**

 

Comprehensive income (loss) for the period is summarized as follows:

 
| ** **                                     | ** ** | **Successor**                                     | ** ** | ** **                                                       | **Predecessor** | ** ** |
|------------------------------------------------|------------|---------------------------------------------------|------------|------------------------------------------------------------------|-----------------|------------|
| ** **                                     | ** ** | **Three Months   Ended March 31,** | ** ** | **Period from   February 26 to   March 31,** | ** **      | ** ** | **Period from   January 1 to   February 26,** | ** ** |
| **(In thousands)**                        | ** ** | **2011**                                          | ** ** | **2010**                                                         | ** **      | ** ** | **2010** | ** ** |
| ** **                                     | ** ** | ** **                                        | ** ** | ** **                                                       | ** **      | ** ** | ** ** | ** ** |
| Net income (loss)                              |       | $                                                 | (5,161     | )                                                                | $               | (53,028    | ) |   | $ | 50,802 |   |
| Other comprehensive income (loss), net of tax: |       |                                              |       |                                                             |            |       |   |   |
| Pension liability adjustment                   |       | (119                                              | )          | —                                                           |            |       | — |   |
| Total comprehensive income (loss)              |       | $                                                 | (5,280     | )                                                                | $               | (53,028    | ) |   | $ | 50,802 |   |

 

Included in accumulated other comprehensive loss is the impact of pension liability fluctuations in the Canadian dollar to U.S. dollar exchange rate related to our Canadian pension plans.

 

**Note 5 - Pension and Other Postretirement Benefit Plans**

 

Components of net periodic benefit cost for the periods ended:

 

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| ** **                                        | ** ** | **Pension Benefits**                   | ** ** | **Other Benefits**                                          | ** **      |
|---------------------------------------------------|------------|---------------------------------------------|------------|------------------------------------------------------------------|-----------------|
| ** **                                        | ** ** | **Successor**                               | ** ** | ** **                                                       | **Predecessor** | ** ** | **Successor** | ** ** | ** ** | **Predecessor** | ** ** |
| ** **                                        | ** ** | **Three   Months   Ended   March 31,** | ** ** | **Period from   February 26   to March 31,** | ** **      | ** ** | **Period from   January 1 to   February 26,** | ** ** | **Three   Months   Ended   March 31,** | ** ** | **Period from   February 26   to March 31,** | ** ** | ** ** | **Period from   January 1 to   February 26,** | ** ** |
| ** **                                        | ** ** | **2011**                                    | ** ** | **2010**                                                         | ** **      | ** ** | **2010** | ** ** | **2011** | ** ** | **2010** | ** ** | ** ** | **2010** | ** ** |
| Service cost-benefits earned during the period    |       | $                                           | 384        |                                                             | $               | 135 |   |   | $ | 269 |   | $ | 129 |   | $ | 31 |   |   | $ | 61 |   |
| Interest cost on projected benefit obligation     |       | 3,005                                       |       | 995                                                              |            |   | 1,989 |   | 1,078 |   | 321 |   |   | 642 |   |
| Expected return on plan assets                    |       | (3,235                                      | )          | (1,123                                                           | )               |   | (2,245 | ) | — |   | — |   |   | — |   |
| Amortization of net transition (asset) obligation |       | —                                      |       | 1                                                                |            |   | 2 |   | — |   | — |   |   | — |   |
| Amortization of prior service (credit) cost       |       | 11                                          |       | 26                                                               |            |   | 53 |   | — |   | (131 | ) |   | (261 | ) |
| Amortization of (gain)/loss                       |       | —                                      |       | 301                                                              |            |   | 603 |   | — |   | — |   |   | — |   |
| Total benefits cost charged to income             |       | $                                           | 165        |                                                             | $               | 335 |   |   | $ | 671 |   | $ | 1,207 |   | $ | 221 |   |   | $ | 442 |   |

 

As of March 31, 2011, $4.8 million has been contributed to our sponsored pension plans.  We presently anticipate contributing an additional $8.6 million to fund our pension plans during 2011 for a total of $13.4 million.

 

**Note 6 — Commitments and Contingencies**

 

We are from time to time involved in various legal proceedings of a character normally incidental to our business. We do not believe that the outcome of these proceedings will have a material adverse effect on our consolidated financial condition or results of our operations and cash flows.

 

In addition to environmental laws that regulate our ongoing operations, we are also subject to environmental remediation liability. Under the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and analogous state laws, we may be liable as a result of the release or threatened release of hazardous materials into the environment regardless of when the release occurred. We are currently involved in several matters relating to the investigation and/or remediation of locations where we have arranged for the disposal of foundry and other wastes. Such matters include situations in which we have been named or are believed to be potentially responsible parties in connection with the contamination of these sites. Additionally, environmental remediation may be required to address soil and groundwater contamination identified at certain of our facilities.

 

As of March 31, 2011, we had an environmental reserve of approximately $1.5 million, related primarily to our foundry operations. This reserve is based on management’s review of potential liabilities as well as cost estimates related thereto. The reserve takes into account the benefit of a contractual indemnity given to us by a prior owner of our wheel-end subsidiary. The failure of the indemnitor to fulfill its obligations could result in future costs that may be material. Any expenditures required for us to comply with applicable environmental laws and/or pay for any remediation efforts will not be reduced or otherwise affected by the existence of the environmental reserve. Our environmental reserve may not be adequate to cover our future costs related to the sites associated with the environmental reserve, and any additional costs may have a material adverse effect on our business, results of operations or financial condition. The discovery of additional environmental issues, the modification of existing laws or regulations or the promulgation of new ones, more vigorous enforcement by regulators, the imposition of joint and several liability under CERCLA or analogous state laws, or other unanticipated events could also result in a material adverse effect.

 

The Iron and Steel Foundry National Emission Standard for Hazardous Air Pollutants (“NESHAP”) was developed pursuant to Section 112(d) of the Clean Air Act and requires major sources of hazardous air pollutants to install controls representative of maximum achievable control technology. Based on currently available information, we do not anticipate material costs regarding ongoing compliance with the NESHAP; however if we are found to be out of compliance with the NESHAP, we could incur liability that could have a material adverse effect on our business, results of operations or financial condition.

 

At the Erie, Pennsylvania, facility, we have obtained an environmental insurance policy to provide coverage with respect to certain environmental liabilities.  Management does not believe that the outcome of any environmental proceedings will have a material adverse effect on our consolidated financial condition or results of operations.

 

As of March 31, 2011, we had approximately 3,034 employees, of which 621 were salaried employees with the remainder paid hourly. Unions represent approximately 1,875 of our employees, which is approximately 62% of our total employees. Each of our unionized facilities has a separate contract with the union that represents the workers employed at

 

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such facility. The union contracts expire at various times over the next few years with the exception of our union contract that covers the hourly employees at our Monterrey, Mexico, facility, which expires on an annual basis in January unless otherwise renewed. The 2011 negotiations in Monterrey were successfully completed prior to the expiration of our union contract and the contract at our Elkhart, Indiana facility was extended through April 2012. In 2011, we have contracts expiring at our Brillion and Livermore facilities.  We do not anticipate that the outcome of the 2011 negotiations will have a material adverse effect on our operating performance or costs.

 

**Note 7 — Financial Instruments**

 

We have determined the estimated fair value amounts of financial instruments using available market information and other appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop the estimates of fair value.  A fair value hierarchy accounting standard exists for those instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and our own assumptions (unobservable inputs).  Determining which category an asset or liability falls within the hierarchy requires significant judgment.  We evaluate our hierarchy disclosures each quarter.

 

The hierarchy consists of three levels:

 
| Level   1 |   | Quoted   market prices in active markets for identical assets or liabilities;                                                               |
|-----------|--------|---------------------------------------------------------------------------------------------------------------------------------------------|
| Level   2 |   | Inputs   other than Level 1 inputs that are either directly or indirectly observable;   and                                                 |
| Level   3 |   | Unobservable   inputs developed using estimates and assumptions developed by us, which   reflect those that a market participant would use. |

 

The carrying amounts of cash and cash equivalents, trade receivables, and accounts payable approximate fair value because of the relatively short maturity of these instruments.  The fair value of debt at March 31, 2011 and December 31, 2010 was $344.9 million and $335.6 million, respectively.  The carrying amounts and related estimated fair values for our remaining financial instruments as of March 31, 2011 and December 31, 2010 are as follows:

 
| ** **                                   | ** ** | **Carrying** | ** ** | **Fair Value** | ** ** |
|----------------------------------------------|------------|--------------|------------|---------------------|------------|
| **As of March 31, 2011** | ** ** | **Amount**   | ** ** | **Level 1**    | ** ** | **Level 2** | ** ** | **Level 3** | ** ** |
| **Liabilities**                              | ** ** | ** **   |       |                |       |   |   |   |   |
| Common stock warrants                        |       | $            | 1,985      |                | $          | 1,985 |   |   |   |   |   |
|                                              |            |              |            |                     |            |  |  |  |  |  |  |

 
| ** **                                      | ** ** | **Carrying** | ** ** | **Fair Value** | ** ** |
|-------------------------------------------------|------------|--------------|------------|---------------------|------------|
| **As of December 31, 2010** | ** ** | **Amount**   | ** ** | **Level 1**    | ** ** | **Level 2** | ** ** | **Level 3** | ** ** |
| **Liabilities**                                 | ** ** | ** **   |       |                |       |   |   |   |   |
| Common stock warrants                           |       | $            | 3,971      |                | $          | 3,971 |   |   |   |   |   |
|                                                 |            |              |            |                     |            |  |  |  |  |  |  |

 

Fair values relating to derivative financial instruments reflect the estimated amounts that we would receive or pay to terminate the contracts at the reporting date based on quoted market prices of comparable contracts as of the balance sheet date.  Inputs that factor into the valuations for our warrants include the strike price of the warrants, the market price of our common stock, dividend yield, volatility, risk-free interest rate, and the contractual term of the financial instrument.

 

The following table summarizes changes in fair value of our Level 3 assets and (liabilities) for the periods January 1, 2010 to February 26, 2010 and February 26, 2010 to December 31, 2010.  There were no Level 3 assets or liabilities as of March 31, 2011:

 
| ** **                        | ** ** | **Prepetition   Common   Stock   Warrants** | ** ** | **Postpetition   Common   Stock   Warrants** | ** ** | **Conversion   Option within   our   Convertible   Notes** | ** ** |
|-----------------------------------|------------|---------------------------------------------|------------|----------------------------------------------|------------|-----------------------------------------------------------------|------------|
| Balance at January 1, 2010   |       | $                                           | (76        | )                                            | $          | —                                                          |       | $ | — |   |
| Net settlements                   |       | 76                                          |       | —                                       |       | —                                                          |       |
| Issuance of securities            |       | —                                      |       | 6,618                                        |       | 170,989                                                         |       |
| Balance at February 26, 2010 |       | $                                           | —     |                                         | $          | 6,618                                                           |       | $ | 170,989 |   |
| Transfer out of level 3 hierarchy |       | —                                      |       | (6,618                                       | )          | —                                                          |       |
| Gain                              |       | —                                      |       | —                                       |       | (75,574                                                         | )          |
| Net settlements upon conversion   |       | —                                      |       | —                                       |       | (95,415                                                         | )          |
| Balance at December 31, 2010 |       | $                                           | —     |                                         | $          | —                                                          |       | $ | — |   |

 

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**Note 8 — Segment Reporting**

 

Based on our continual monitoring of the long-term economic characteristics, products and production processes, class of customer, and distribution methods of our operating segments, we determined our five operating segments aggregate into three reportable segments:  Wheels, Components, and Other.  All of our segments design, manufacture and market products to the commercial vehicle industry.  The Wheels segment’s products consist of wheels for heavy- and medium-duty trucks and commercial trailers.  The Components segment’s products consist primarily of truck body and chassis parts, wheel-end components and assemblies.  The Other segment’s products primarily consist of other commercial vehicle components, including steerable drive axles and gearboxes.  We believe this segmentation is appropriate based upon operating decisions and performance assessments by our President and Chief Executive Officer, who we define as our chief operating decision maker. The accounting policies of the reportable segments are the same as described in Note 1, Summary of Significant Accounting Policies.

 
| ** **                     | ** ** | **Successor**                                     | ** ** | ** **                                                       | **Predecessor** | ** ** |
|--------------------------------|------------|---------------------------------------------------|------------|------------------------------------------------------------------|-----------------|------------|
| ** **                     | ** ** | **Three Months   Ended March 31,** | ** ** | **Period from   February 26 to   March 31,** | ** **      | ** ** | **Period from   January 1 to   February 26,** | ** ** |
| ** **                     | ** ** | **2011**                                          | ** ** | **2010**                                                         | ** **      | ** ** | **2010** | ** ** |
| Net sales:                     |       |                                              |       |                                                             |            |       |   |   |
| Wheels                         |       | $                                                 | 91,509     |                                                             | $               | 23,761     |   |   | $ | 38,379 |   |
| Components                     |       | 121,722                                           |       | 35,154                                                           |            |       | 57,233 |   |
| Other                          |       | 5,608                                             |       | 5,999                                                            |            |       | 8,447 |   |
| Consolidated total             |       | $                                                 | 218,839    |                                                             | $               | 64,914     |   |   | $ | 104,059 |   |
|                           |       |                                              |       |                                                             |            |       |   |   |
| Income (loss) from operations: |       |                                              |       |                                                             |            |       |   |   |
| Wheels                         |       | $                                                 | 11,488     |                                                             | 1,375           |       |   | $ | 2,663 |   |
| Components                     |       | 169                                               |       | 1,311                                                            |            |       | (2,250 | ) |
| Other                          |       | 208                                               |       | 743                                                              |            |       | 1,662 |   |
| Corporate                      |       | (10,190                                           | )          | (2,195                                                           | )               |       | (5,188 | ) |
| Consolidated total             |       | $                                                 | 1,675      |                                                             | $               | 1,234      |   |   | $ | (3,113 | ) |

 
| ** **         | ** ** | **As of**               | ** ** |
|--------------------|------------|------------------------------|------------|
| ** **         | ** ** | **March 31, 2011** | ** ** | **December 31, 2010** | ** ** |
| Total assets:      |       |                         |       |   |   |
| Wheels             |       | $                            | 502,573    |   | $ | 482,175 |   |
| Components         |       | 273,249                      |       | 254,378 |   |
| Other              |       | 46,736                       |       | 49,053 |   |
| Corporate          |       | 42,507                       |       | 88,444 |   |
| Consolidated total |       | $                            | 865,065    |   | $ | 874,050 |   |

 

**Note 9 - Debt**

 

Debt at March 31, 2011, and December 31, 2010, consisted entirely of our outstanding 9.5% senior secured notes, net of discount.  The Company also has an ABL credit facility with an aggregate principal amount of $75 million (up to $100 million under certain conditions), which expires July 29, 2014.  There are no borrowings under the ABL facility at March 31, 2011.

 

Our credit documents****(the ABL facility and the indentures governing the senior secured notes) contain operating covenants that limit the discretion of management with respect to certain business matters.  These covenants place significant restrictions on, among other things, the ability to incur additional debt, to pay dividends, to create liens, to make certain payments and investments and to sell or otherwise dispose of assets and merge or consolidate with other entities.  In addition, the ABL facility contains a financial covenant which requires us to maintain a fixed charge coverage ratio during any compliance period, which is anytime when the excess availability is less than or equal to the greater of $10.0 million or 15 percent of the total commitment under the ABL facility.  Due to the amount of our excess availability (as calculated under the ABL facility), the Company is not currently in a compliance period and, we do not have to maintain a fixed charge coverage ratio, although this is subject to change.

 

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**Note 10 — Guarantor and Non-guarantor Financial Statements**

 

Our senior secured notes are fully and unconditionally guaranteed, on a senior basis, by all of our existing and future domestic subsidiaries (“Guarantor Subsidiaries”). The non-guarantor subsidiaries are our foreign subsidiaries.  The following condensed financial information illustrates the composition of the combined Guarantor Subsidiaries:

 

**CONDENSED CONSOLIDATED BALANCE SHEET**

 
| ** **                                                   | ** ** | **March 31, 2011** | ** ** |
|--------------------------------------------------------------|------------|------------------------------|------------|
| **(in thousands)**                                      | ** ** | **Parent**                   | ** ** | **Guarantor   Subsidiaries** | ** ** | **Non-guarantor   Subsidiaries** | ** ** | **Eliminations** | ** ** | **Total** | ** ** |
| **ASSETS**                                                   |       |                         |       |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                                    |       | $                            | 27,001     |   | $ | (3,064 | ) | $ | 7,803 |   | $ | — |   | $ | 31,740 |   |
| Accounts and other receivables, net                          |       | 62,454                       |       | 163,099 |   | 7,418 |   | (120,538 | ) | 112,433 |   |
| Inventories                                                  |       | 20,594                       |       | 38,639 |   | 5,484 |   | — |   | 64,717 |   |
| Other current assets                                         |       | 6,065                        |       | 9,343 |   | 5,449 |   | — |   | 20,857 |   |
| Total current assets                                         |       | 116,114                      |       | 208,017 |   | 26,154 |   | (120,538 | ) | 229,747 |   |
| Property, plant, and equipment, net                          |       | 44,686                       |       | 127,116 |   | 62,280 |   | — |   | 234,082 |   |
| Goodwill                                                     |       | 97,127                       |       | 80,445 |   | — |   | — |   | 177,572 |   |
| Intangible assets, net                                       |       | 141,316                      |       | 66,695 |   | — |   | — |   | 208,011 |   |
| Investments in and advances to subsidiaries and   affiliates |       | 353,565                      |       | — |   | — |   | (353,565 | ) | — |   |
| Other non-current assets                                     |       | 10,494                       |       | 3,187 |   | 1,972 |   | — |   | 15,653 |   |
| TOTAL                                                        |       | $                            | 763,302    |   | $ | 485,460 |   | $ | 90,406 |   | $ | (474,103 | ) | $ | 865,065 |   |
| **LIABILITIES AND STOCKHOLDERS’   EQUITY**              |       |                         |       |   |   |   |   |   |   |   |   |
| Accounts payable                                             |       | $                            | 11,508     |   | $ | 43,721 |   | $ | 9,640 |   | $ | — |   | $ | 64,869 |   |
| Accrued payroll and compensation                             |       | 2,845                        |       | 8,464 |   | 4,986 |   | — |   | 16,295 |   |
| Accrued interest payable                                     |       | 5,083                        |       | — |   | — |   | — |   | 5,083 |   |
| Accrued and other liabilities                                |       | 105,811                      |       | 20,861 |   | 21,007 |   | (120,538 | ) | 27,141 |   |
| Total current liabilities                                    |       | 125,247                      |       | 73,046 |   | 35,633 |   | (120,538 | ) | 113,388 |   |
| Long term debt                                               |       | 302,293                      |       | — |   | — |   | — |   | 302,293 |   |
| Deferred and non-current income taxes                        |       | 26,431                       |       | 6,516 |   | 7,388 |   | — |   | 40,335 |   |
| Other non-current liabilities                                |       | 15,930                       |       | 80,167 |   | 19,551 |   | — |   | 115,648 |   |
| Stockholders’ equity                                    |       | 293,401                      |       | 325,731 |   | 27,834 |   | (353,565 | ) | 293,401 |   |
| TOTAL                                                        |       | $                            | 763,302    |   | $ | 485,460 |   | $ | 90,406 |   | $ | (474,103 | ) | $ | 865,065 |   |

 
| ** **                                                   | ** ** | **December 31, 2010** | ** ** |
|--------------------------------------------------------------|------------|---------------------------------|------------|
| **(in thousands)**                                      | ** ** | **Parent**                      | ** ** | **Guarantor   Subsidiaries** | ** ** | **Non-guarantor   Subsidiaries** | ** ** | **Eliminations** | ** ** | **Total** | ** ** |
| **ASSETS**                                                   |       |                            |       |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                                    |       | $                               | 75,114     |   | $ | (2,225 | ) | $ | 5,577 |   | — |   | $ | 78,466 |   |
| Accounts and other receivables, net                          |       | 43,503                          |       | 157,742 |   | 5,071 |   | $ | (130,614 | ) | 75,702 |   |
| Inventories                                                  |       | 19,020                          |       | 32,063 |   | 4,735 |   | — |   | 55,818 |   |
| Other current assets                                         |       | 3,546                           |       | 9,237 |   | 5,735 |   | — |   | 18,518 |   |
| Total current assets                                         |       | 141,183                         |       | 196,817 |   | 21,118 |   | (130,614 | ) | 228,504 |   |
| Property, plant, and equipment, net                          |       | 45,909                          |       | 131,092 |   | 64,051 |   | — |   | 241,052 |   |
| Goodwill                                                     |       | 97,127                          |       | 80,445 |   | — |   | — |   | 177,572 |   |
| Intangible assets, net                                       |       | 143,728                         |       | 68,928 |   | — |   | — |   | 212,656 |   |
| Investments in and advances to subsidiaries and   affiliates |       | 349,455                         |       | — |   | — |   | (349,455 | ) | — |   |
| Other non-current assets                                     |       | 10,977                          |       | 2,329 |   | 960 |   | — |   | 14,266 |   |
| TOTAL                                                        |       | $                               | 788,379    |   | $ | 479,611 |   | $ | 86,129 |   | $ | (480,069 | ) | $ | 874,050 |   |
| **LIABILITIES AND STOCKHOLDERS’   EQUITY**              |       |                            |       |   |   |   |   |   |   |   |   |
| Accounts payable                                             |       | $                               | 9,563      |   | $ | 39,641 |   | $ | 6,120 |   | — |   | $ | 55,324 |   |
| Accrued payroll and compensation                             |       | 3,683                           |       | 8,728 |   | 4,909 |   | — |   | 17,320 |   |
| Accrued interest payable                                     |       | 12,682                          |       | — |   | — |   | — |   | 12,682 |   |
| Accrued and other liabilities                                |       | 115,380                         |       | 21,588 |   | 20,840 |   | $ | (130,614 | ) | 27,194 |   |
| Total current liabilities                                    |       | 141,308                         |       | 69,957 |   | 31,869 |   | (130,614 | ) | 112,520 |   |
| Long term debt                                               |       | 302,031                         |       | — |   | — |   | — |   | 302,031 |   |
| Deferred and non-current income taxes                        |       | 26,664                          |       | 6,516 |   | 7,440 |   | — |   | 40,620 |   |
| Other non-current liabilities                                |       | 20,277                          |       | 80,488 |   | 20,015 |   | — |   | 120,780 |   |
| Stockholders’ equity                                    |       | 298,099                         |       | 322,650 |   | 26,805 |   | (349,455 | ) | 298,099 |   |
| TOTAL                                                        |       | $                               | 788,379    |   | $ | 479,611 |   | $ | 86,129 |   | $ | (480,069 | ) | $ | 874,050 |   |

 

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** **

**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS**

** **
| ** **                                  | ** ** | **Successor**                                                  | ** ** |
|---------------------------------------------|------------|----------------------------------------------------------------|------------|
| ** **                                  | ** ** | **Three Months Ended March 31, 2011** | ** ** |
| **(in thousands)**                     | ** ** | **Parent**                                                     | ** ** | **Guarantor   Subsidiaries** | ** ** | **Non-guarantor   Subsidiaries** | ** ** | **Eliminations** | ** ** | **Total** | ** ** |
| Net sales                                   |       | $                                                              | 101,403    |   | $ | 120,584 |   | $ | 37,740 |   | $ | (40,888 | ) | $ | 218,839 |   |
| Cost of goods sold                          |       | 92,311                                                         |       | 113,505 |   | 35,452 |   | (40,888 | ) | 200,380 |   |
| Gross profit                                |       | 9,092                                                          |       | 7,079 |   | 2,288 |   | — |   | 18,459 |   |
| Operating expenses                          |       | 12,904                                                         |       | 3,797 |   | 83 |   | — |   | 16,784 |   |
| Income (loss) from operations               |       | (3,812                                                         | )          | 3,282 |   | 2,205 |   | — |   | 1,675 |   |
| Other income (expense):                     |       |                                                           |       |   |   |   |   |   |   |   |   |
| Interest (expense), net                     |       | (8,122                                                         | )          | (33 | ) | (185 | ) | — |   | (8,340 | ) |
| Equity in earnings (losses) of subsidiaries |       | 4,229                                                          |       | — |   | — |   | (4,229 | ) | — |   |
| Other income (expense), net                 |       | 2,463                                                          |       | (168 | ) | (291 | ) | — |   | 2,004 |   |
| Income (loss) before income taxes           |       | (5,242                                                         | )          | 3,081 |   | 1,729 |   | (4,229 | ) | (4,661 | ) |
| Income tax provision (benefit)              |       | (81                                                            | )          | — |   | 581 |   | — |   | 500 |   |
| Net income (loss)                           |       | $                                                              | (5,161     | ) | $ | 3,081 |   | $ | 1,148 |   | $ | (4,229 | ) | $ | (5,161 | ) |

 
| ** **                                  | ** ** | **Successor**                                                                    | ** ** |
|---------------------------------------------|------------|----------------------------------------------------------------------------------|------------|
| ** **                                  | ** ** | **Period from February 26 to March 31, 2010** | ** ** |
| **(in thousands)**                     | ** ** | **Parent**                                                                       | ** ** | **Guarantor   Subsidiaries** | ** ** | **Non-guarantor   Subsidiaries** | ** ** | **Eliminations** | ** ** | **Total** | ** ** |
| Net sales                                   |       | $                                                                                | 30,881     |   | $ | 35,815 |   | $ | 10,147 |   | $ | (11,929 | ) | $ | 64,914 |   |
| Cost of goods sold                          |       | 32,367                                                                           |       | 30,630 |   | 8,246 |   | (11,929 | ) | 59,314 |   |
| Gross profit (loss)                         |       | (1,486                                                                           | )          | 5,185 |   | 1,901 |   | — |   | 5,600 |   |
| Operating expenses                          |       | 3,049                                                                            |       | 1,286 |   | 31 |   | — |   | 4,366 |   |
| Income (loss) from operations               |       | (4,535                                                                           | )          | 3,899 |   | 1,870 |   | — |   | 1,234 |   |
| Other income (expense):                     |       |                                                                             |       |   |   |   |   |   |   |   |   |
| Interest expense, net                       |       | (3,140                                                                           | )          | (11 | ) | (342 | ) | — |   | (3,493 | ) |
| Equity in earnings (losses) of subsidiaries |       | 5,909                                                                            |       | — |   | — |   | (5,909 | ) | — |   |
| Other income (expense), net                 |       | (51,420                                                                          | )          | 67 |   | 426 |   | — |   | (50,927 | ) |
| Income (loss) before and income taxes       |       | (53,186                                                                          | )          | 3,955 |   | 1,954 |   | (5,909 | ) | (53,186 | ) |
| Income tax benefit                          |       | (158                                                                             | )          | — |   | — |   | — |   | (158 | ) |
| Net income (loss)                           |       | $                                                                                | (53,028    | ) | $ | 3,955 |   | $ | 1,954 |   | $ | (5,909 | ) | $ | (53,028 | ) |

 
| ** **                                                   | ** ** | **Predecessor**                                                                   | ** ** |
|--------------------------------------------------------------|------------|-----------------------------------------------------------------------------------|------------|
| ** **                                                   | ** ** | **Period from January 1 to February 26, 2010** | ** ** |
| **(in thousands)**                                      | ** ** | **Parent**                                                                        | ** ** | **Guarantor   Subsidiaries** | ** ** | **Non-guarantor   Subsidiaries** | ** ** | **Eliminations** | ** ** | **Total** | ** ** |
| Net sales                                                    |       | $                                                                                 | 47,897     |   | $ | 56,971 |   | $ | 14,011 |   | $ | (14,820 | ) | $ | 104,059 |   |
| Cost of goods sold                                           |       | 45,553                                                                            |       | 54,526 |   | 14,318 |   | (14,820 | ) | 99,577 |   |
| Gross profit (loss)                                          |       | 2,344                                                                             |       | 2,445 |   | (307 | ) | — |   | 4,482 |   |
| Operating expenses                                           |       | 5,327                                                                             |       | 2,216 |   | 52 |   | — |   | 7,595 |   |
| Income (loss) from operations                                |       | (2,983                                                                            | )          | 229 |   | (359 | ) | — |   | (3,113 | ) |
| Other income (expense):                                      |       |                                                                              |       |   |   |   |   |   |   |   |   |
| Interest expense, net                                        |       | (6,804                                                                            | )          | (21 | ) | (671 | ) | — |   | (7,496 | ) |
| Equity in earnings (losses) of subsidiaries                  |       | (826                                                                              | )          | — |   | — |   | 826 |   | — |   |
| Other income (expense), net                                  |       | 547                                                                               |       | 49 |   | (30 | ) | — |   | 566 |   |
| Income (loss) before reorganization items and   income taxes |       | (10,066                                                                           | )          | 257 |   | (1,060 | ) | 826 |   | (10,043 | ) |
| Reorganization expense (income)                              |       | (59,334                                                                           | )          | 21 |   | 2 |   | — |   | (59,311 | ) |
| Income tax benefit                                           |       | (1,534                                                                            | )          | — |   | — |   | — |   | (1,534 | ) |
| Net income (loss)                                            |       | $                                                                                 | 50,802     |   | $ | 236 |   | $ | (1,062 | ) | $ | 826 |   | $ | 50,802 |   |

 

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**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

 
| ** **                                                                                           | ** ** | **Successor**                                                  | ** ** |
|------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------|------------|
| ** **                                                                                           | ** ** | **Three Months Ended March 31, 2011** | ** ** |
| **(in thousands)**                                                                              | ** ** | **Parent   Company**                                           | ** ** | **Guarantor   Subsidiaries** | ** ** | **Non-guarantor   Subsidiaries** | ** ** | **Eliminations** | ** ** | **Total** | ** ** |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                                                |       |                                                           |       |   |   |   |   |   |   |   |   |
| Net income (loss)                                                                                    |       | $                                                              | (5,161     | ) | $ | 3,081 |   | $ | 1,148 |   | $ | (4,229 | ) | $ | (5,161 | ) |
| Adjustments to reconcile net income (loss) to net   cash provided by (used in) operating activities: |       |                                                           |       |   |   |   |   |   |   |   |   |
| Depreciation                                                                                         |       | 2,328                                                          |       | 5,872 |   | 2,062 |   | — |   | 10,262 |   |
| Amortization — deferred financing costs                                                         |       | 690                                                            |       | — |   | — |   | — |   | 690 |   |
| Amortization — other intangible assets                                                          |       | 2,720                                                          |       | 1,201 |   | — |   | — |   | 3,921 |   |
| Gain on warrant valuation                                                                            |       | (1,985                                                         | )          | — |   | — |   | — |   | (1,985 | ) |
| Loss (gain) on disposal of assets                                                                    |       | —                                                         |       | 27 |   | 1 |   | — |   | 28 |   |
| Equity in earnings of subsidiaries and affiliates                                                    |       | (4,229                                                         | )          | — |   | — |   | 4,229 |   | — |   |
| Non-cash stock-based compensation                                                                    |       | 582                                                            |       | — |   | — |   | — |   | 582 |   |
| Change in other operating items                                                                      |       | (40,770                                                        | )          | (8,124 | ) | (134 | ) | — |   | (49,028 | ) |
| Net cash provided by (used in) operating   activities                                                |       | (45,825                                                        | )          | 2,057 |   | 3,077 |   | — |   | (40,691 | ) |
|                                                                                                 |       |                                                           |       |   |   |   |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                                                |       |                                                           |       |   |   |   |   |   |   |   |   |
| Purchases of property, plant, and equipment                                                          |       | (2,288                                                         | )          | (10,681 | ) | (851 | ) | — |   | (13,820 | ) |
| Other                                                                                                |       | —                                                         |       | 7,785 |   | — |   | — |   | 7,785 |   |
| Net cash used in investing activities                                                                |       | (2,288                                                         | )          | (2,896 | ) | (851 | ) | — |   | (6,035 | ) |
|                                                                                                 |       |                                                           |       |   |   |   |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                                                |       |                                                           |       |   |   |   |   |   |   |   |   |
| Other                                                                                                |       | —                                                         |       | — |   | — |   | — |   | — |   |
| Net cash used in financing activities                                                                |       | —                                                         |       | — |   | — |   | — |   | — |   |
|                                                                                                 |       |                                                           |       |   |   |   |   |   |   |   |   |
| Increase (decrease) in cash and cash equivalents                                                     |       | (48,113                                                        | )          | (839 | ) | 2,226 |   | — |   | (46,726 | ) |
| Cash and cash equivalents, beginning of year                                                         |       | 75,114                                                         |       | (2,225 | ) | 5,577 |   | — |   | 78,466 |   |
| Cash and cash equivalents, end of period                                                             |       | $                                                              | 27,001     |   | $ | (3,064 | ) | $ | 7,803 |   | $ | — |   | $ | 31,740 |   |

 
| ** **                                                                                             | ** ** | **Successor**                                                                    | ** ** |
|--------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------|------------|
| ** **                                                                                             | ** ** | **Period from February 26 to March 31, 2010** | ** ** |
| **(in thousands)**                                                                                | ** ** | **Parent   Company**                                                             | ** ** | **Guarantor   Subsidiaries** | ** ** | **Non-guarantor   Subsidiaries** | ** ** | **Eliminations** | ** ** | **Total** | ** ** |
| CASH FLOWS FROM   OPERATING ACTIVITIES:                                                                |       |                                                                             |       |   |   |   |   |   |   |   |   |
| Net income   (loss)                                                                                    |       | $                                                                                | (53,028    | ) | $ | 3,955 |   | $ | 1,954 |   | $ | (5,909 | ) | $ | (53,028 | ) |
| Adjustments to   reconcile net income (loss) to net cash provided by (used in) operating   activities: |       |                                                                             |       |   |   |   |   |   |   |   |   |
| Depreciation                                                                                           |       | 545                                                                              |       | 2,198 |   | 442 |   | — |   | 3,185 |   |
| Amortization –   other intangible assets                                                          |       | 495                                                                              |       | 465 |   | — |   | — |   | 960 |   |
| Loss on disposal   of assets                                                                           |       | 2                                                                                |       | 18 |   | — |   | — |   | 20 |   |
| Deferred income   taxes                                                                                |       | (158                                                                             | )          | — |   | — |   | — |   | (158 | ) |
| Payments on   reorganization items                                                                     |       | (7,091                                                                           | )          | — |   | — |   | — |   | (7,091 | ) |
| Paid-in-kind   interest                                                                                |       | 875                                                                              |       | — |   | — |   | — |   | 875 |   |
| Equity in   earnings of subsidiaries and affiliates                                                    |       | (5,909                                                                           | )          | — |   | — |   | 5,909 |   | — |   |
| Non-cash change   in market valuation - convertible notes                                              |       | 50,601                                                                           |       | — |   | — |   | — |   | 50,601 |   |
| Change in other   operating items                                                                      |       | (4,521                                                                           | )          | (9,606 | ) | (2,911 | ) | — |   | (17,038 | ) |
| Net cash used in   operating activities                                                                |       | (18,189                                                                          | )          | (2,970 | ) | (515 | ) | — |   | (21,674 | ) |
|                                                                                                   |       |                                                                             |       |   |   |   |   |   |   |   |   |
| CASH FLOWS FROM   INVESTING ACTIVITIES:                                                                |       |                                                                             |       |   |   |   |   |   |   |   |   |
| Purchases of   property, plant, and equipment                                                          |       | (1,107                                                                           | )          | (672 | ) | (30 | ) | — |   | (1,809 | ) |
| Other                                                                                                  |       | —                                                                           |       | 65 |   | — |   | — |   | 65 |   |
| Net cash used in   investing activities                                                                |       | (1,107                                                                           | )          | (607 | ) | (30 | ) | — |   | (1,744 | ) |
|                                                                                                   |       |                                                                             |       |   |   |   |   |   |   |   |   |
| CASH FLOWS FROM   FINANCING ACTIVITIES:                                                                |       |                                                                             |       |   |   |   |   |   |   |   |   |
| Other                                                                                                  |       | (66                                                                              | )          | — |   | — |   | — |   | (66 | ) |
| Net cash used in   financing activities                                                                |       | (66                                                                              | )          | — |   | — |   | — |   | (66 | ) |
|                                                                                                   |       |                                                                             |       |   |   |   |   |   |   |   |   |
| Decrease in cash   and cash equivalents                                                                |       | (19,362                                                                          | )          | (3,577 | ) | (545 | ) | — |   | (23,484 | ) |
| Cash and cash   equivalents, beginning of period                                                       |       | 80,971                                                                           |       | (4,264 | ) | 3,640 |   | — |   | 80,347 |   |
| Cash and cash   equivalents, end of period                                                             |       | $                                                                                | 61,609     |   | $ | (7,841 | ) | $ | 3,095 |   | $ | — |   | $ | 56,863 |   |

 

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| ** **                                                                                           | ** ** | **Predecessor**                                                                   | ** ** |
|------------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------|------------|
| ** **                                                                                           | ** ** | **Period from January 1 to February 26, 2010** | ** ** |
| **(in thousands)**                                                                              | ** ** | **Parent   Company**                                                              | ** ** | **Guarantor   Subsidiaries** | ** ** | **Non-guarantor   Subsidiaries** | ** ** | **Eliminations** | ** ** | **Total** | ** ** |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                                                |       |                                                                              |       |   |   |   |   |   |   |   |   |
| Net income (loss)                                                                                    |       | $                                                                                 | 50,802     |   | $ | 236 |   | $ | (1,062 | ) | $ | 826 |   | $ | 50,802 |   |
| Adjustments to reconcile net income (loss) to net   cash provided by (used in) operating activities: |       |                                                                              |       |   |   |   |   |   |   |   |   |
| Depreciation                                                                                         |       | 1,205                                                                             |       | 4,527 |   | 979 |   | — |   | 6,711 |   |
| Amortization — deferred financing costs                                                         |       | 690                                                                               |       | — |   | 4 |   | — |   | 694 |   |
| Amortization — other intangible assets                                                          |       | 31                                                                                |       | 790 |   | — |   | — |   | 821 |   |
| Reorganization items                                                                                 |       | (59,334                                                                           | )          | 21 |   | 2 |   | — |   | (59,311 | ) |
| Payments on reorganization items                                                                     |       | (12,164                                                                           | )          | — |   | — |   | — |   | (12,164 | ) |
| Paid-in-kind interest                                                                                |       | 1,769                                                                             |       | — |   | — |   | — |   | 1,769 |   |
| Loss (gain) on disposal of assets                                                                    |       | 2                                                                                 |       | 1 |   | — |   | — |   | 3 |   |
| Equity in earnings of subsidiaries and affiliates                                                    |       | 826                                                                               |       | — |   | — |   | (826 | ) | — |   |
| Deferred income taxes                                                                                |       | (1,560                                                                            | )          | — |   | — |   | — |   | (1,560 | ) |
| Change in other operating items                                                                      |       | (752                                                                              | )          | (6,636 | ) | (1,150 | ) | — |   | (8,538 | ) |
| Net cash used in operating activities                                                                |       | (18,485                                                                           | )          | (1,061 | ) | (1,227 | ) | — |   | (20,773 | ) |
|                                                                                                 |       |                                                                              |       |   |   |   |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                                                |       |                                                                              |       |   |   |   |   |   |   |   |   |
| Purchases of property, plant, and equipment                                                          |       | (60                                                                               | )          | (1,377 | ) | (20 | ) | — |   | (1,457 | ) |
| Other                                                                                                |       | (600                                                                              | )          | 45 |   | — |   | — |   | (555 | ) |
| Net cash used in investing activities                                                                |       | (660                                                                              | )          | (1,332 | ) | (20 | ) | — |   | (2,012 | ) |
|                                                                                                 |       |                                                                              |       |   |   |   |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                                                |       |                                                                              |       |   |   |   |   |   |   |   |   |
| Net proceeds from debt issuance                                                                      |       | 46,611                                                                            |       | — |   | — |   | — |   | 46,611 |   |
| Net cash provided by financing activities                                                            |       | 46,611                                                                            |       | — |   | — |   | — |   | 46,611 |   |
|                                                                                                 |       |                                                                              |       |   |   |   |   |   |   |   |   |
| Increase (decrease) in cash and cash equivalents                                                     |       | 27,466                                                                            |       | (2,393 | ) | (1,247 | ) | — |   | 23,826 |   |
| Cash and cash equivalents, beginning of year                                                         |       | 53,505                                                                            |       | (1,871 | ) | 4,887 |   | — |   | 56,521 |   |
| Cash and cash equivalents, end of period                                                             |       | $                                                                                 | 80,971     |   | $ | (4,264 | ) | $ | 3,640 |   | $ | — |   | $ | 80,347 |   |

 

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**Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.**

 

The accompanying unaudited condensed interim consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America and such principles are applied on a basis consistent with the information reflected in our Form 10-K for the year ended December 31, 2010 filed with the Securities and Exchange Commission (“SEC”).  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the rules and regulations promulgated by the SEC.  In the opinion of management, the interim financial information includes all adjustments and accruals, consisting only of normal recurring adjustments and adjustments related to fresh start accounting as noted in Note 1 — Summary of Significant Accounting Policies, which are necessary for a fair presentation of results for the respective interim periods.  The results of operations for the three months ended March 31, 2011 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2011 or any interim period.  Except for the historical information contained herein, this quarterly report on Form 10-Q contains forward-looking statements that involve risks and uncertainties.  Our actual results may differ materially from those indicated by such forward-looking statements.

 

Overview

 

We are one of the largest and most diversified manufacturers and suppliers of commercial vehicle components in North America. Our products include commercial vehicle wheels, wheel-end components and assemblies, truck body and chassis parts, and other commercial vehicle components. We market our products under some of the most recognized brand names in the industry, including Accuride, Gunite, Imperial, Fabco, Brillion, and Highway Original. We believe that we have number one or number two market positions in steel wheels, forged aluminum wheels, brake drums, disc wheel hubs, and metal bumpers in commercial vehicles. We serve the leading OEMs and their related aftermarket channels in most major segments of the commercial vehicle market, including heavy- and medium-duty trucks, commercial trailers, light trucks, buses, as well as specialty and military vehicles.

 

Our primary product lines are standard equipment used by a majority of North American heavy- and medium-duty truck OEMs, which creates a significant barrier to entry. We believe that substantially all heavy-duty truck models manufactured in North America contain one or more Accuride components.

 

Our diversified customer base includes substantially all of the leading commercial vehicle OEMs, such as Daimler Truck North America, LLC, with its Freightliner and Western Star brand trucks, PACCAR, with its Peterbilt and Kenworth brand trucks, Navistar, with its International brand trucks, and Volvo/Mack, with its Volvo and Mack brand trucks. Our primary commercial trailer customers include leading commercial trailer OEMs, such as Great Dane Limited Partnership and Wabash National, Inc. Our major light truck customer is General Motors Corporation. Our product portfolio is supported by strong sales, marketing and design engineering capabilities and is manufactured in 15 strategically located, technologically-advanced facilities across the United States, Mexico and Canada.

 

Effective November 18, 2010, Accuride Corporation implemented a one-for-ten reverse stock split of its Common Stock.  Unless otherwise indicated, all share amounts and per share data for the Successor Company have been adjusted to reflect this reverse stock split.

 

The heavy- and medium-duty truck and commercial trailer markets and the related aftermarket are the primary drivers of our sales. These markets are, in turn, directly influenced by conditions in the North American truck industry and generally by conditions in other industries which indirectly impact the truck industry, such as the home-building industry, and by overall economic growth and consumer spending.  Accordingly, the current economic conditions described above have led to a severe downturn in the North American truck and vehicle supply industries, which resulted in a significant decline in our sales volume and necessitated our bankruptcy filings in October 2009, as described above in “Note 1 —

 

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Summary of Significant Accounting Policies — Chapter 11 Proceedings.”  Although current industry forecasts predict continued improvement in commercial vehicle production in 2011, we cannot accurately predict the commercial vehicle cycle.  Accordingly, any deterioration of the economic recovery may lead to further reduced spending and deterioration in the North American truck and vehicle supply industries for the foreseeable future. In February 2010, we emerged from bankruptcy with reduced financial leverage and an improved capital structure, which we believe will better enable us to operate in this economic environment.  However, we continue to be a highly leveraged company, and a delayed****or failed economic recovery would continue to have a material adverse effect on our business, results of operations and financial condition.

 

Using the commercial vehicle industry production forecasts, we expect results from operations to improve in 2011 compared to 2010 due to increased demand for our product, improved operational efficiencies, and reduced fees and expenses related to our credit facilities.

 

On March 30, 2011, we, along with one other United States domestic commercial vehicle steel wheel supplier, filed antidumping and countervailing duty petitions with the United States International Trade Commission and the United States Department of Commerce alleging that manufacturers of certain steel wheels in China are dumping their products in the United States and that these manufacturers have been subsidized by their government in violation of United States trade laws.  As of the date of this filing, neither the International Trade Commission nor the Department of Commerce has issued any decision in response to our petition.  If the Department of Commerce makes a final determination that dumping or subsidies are present and the International Trade Commission determines that the domestic industry has been injured as a result, the Department of Commerce will impose duties on the covered products imported from China in order to offset the effects of the dumping and subsidies.  No assurance can be given that these determinations will be made, that duties will be imposed or as to the amount of any duties that may be imposed.

 

**Results of Operations**

 

In connection with our emergence from Chapter 11 bankruptcy proceedings and the adoption of fresh-start reporting, the results of operations for 2010 separately present the 2010 Successor Period and the 2010 Predecessor Period. Although the 2010 Successor Period and the 2010 Predecessor Period are distinct reporting periods, the effects of emergence and fresh-start reporting did not have a material impact on the comparability of our results of operations between the periods. Accordingly, references to 2010 results of operations for the three months ended March 31, 2010 combine the two periods in order to enhance the comparability of such information to the current year.

 
| **(Dollars in thousands)**               | ** ** | **Three months ended   March 31, 2011** | ** ** | **Three months ended   March 31, 2010** | ** ** |
|----------------------------------------------------|------------|-------------------------------------------------------------|------------|-------------------------------------------------------------|------------|
| ** **                                         | ** ** | ** **                                                  | ** ** | ** **                                                  | ** ** | ** ** | ** ** | ** ** | ** ** |
| Net sales:                                         |       |                                                        |       |                                                        |       |   |   |   |   |
| Wheels                                             |       | $                                                           | 91,509     |                                                        | 41.8       | % | $ | 62,140 |   | 36.8 | % |
| Components                                         |       | 121,722                                                     |       | 55.6                                                        | %          | 92,387 |   | 54.7 | % |
| Other                                              |       | 5,608                                                       |       | 2.6                                                         | %          | 14,446 |   | 8.5 | % |
| Total net sales                                    |       | $                                                           | 218,839    |                                                        | 100        | % | $ | 168,973 |   | 100 | % |
| Gross Profit:                                      |       |                                                        |       |                                                        |       |   |   |   |   |
| Wheels                                             |       | 16,059                                                      |       | 17.5                                                        | %          | 6,292 |   | 10.1 | % |
| Components                                         |       | 2,874                                                       |       | 2.4                                                         | %          | 1,017 |   | 1.1 | % |
| Other                                              |       | 1,030                                                       |       | 18.4                                                        | %          | 3,714 |   | 25.7 | % |
| Corporate                                          |       | (1,504                                                      | )          | —                                                      | %          | (941 | ) | — | % |
| Total gross profit                                 |       | 18,459                                                      |       | 8.4                                                         | %          | 10,082 |   | 6.0 | % |
| Operating expenses                                 |       | 16,784                                                      |       | 7.7                                                         | %          | 11,961 |   | 7.1 | % |
| Income (loss) from operations                      |       | 1,675                                                       |       | 0.8                                                         | %          | (1,879 | ) | (1.1 | )% |
| Interest (expense), net                            |       | (8,340                                                      | )          | (3.8                                                        | )%         | (10,989 | ) | (6.5 | )% |
| Non-cash market valuation — convertible notes |       | —                                                      |       | —                                                      | %          | (50,601 | ) | (29.9 | )% |
| Other income, net                                  |       | 2,004                                                       |       | 0.9                                                         | %          | 240 |   | 0.1 | % |
| Reorganization items (gain)                        |       | —                                                      |       | —                                                      | %          | (59,311 | ) | (35.1 | )% |
| Income tax expense (benefit)                       |       | 500                                                         |       | 0.2                                                         | %          | (1,692 | ) | (1.0 | )% |
| Net loss                                           |       | $                                                           | (5,161     | )                                                           | (2.4       | )% | $ | (2,226 | ) | (1.3 | )% |

 

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**Net Sales.**  Net sales for the three months ended March 31, 2011, were $218.8 million, which was an increase of 29.5%, compared to net sales of $169.0 million for the three months ended March 31, 2010.  The increase was due to increased product demand from both our OEM and aftermarket customers.

 

**Gross Profit. **Gross profit increased $8.4 million to $18.5 million for the three months ended March 31, 2011 due to the contribution from increased net sales and improvements in operating efficiencies.

 

**Operating Expenses. **Operating expenses increased $4.8 million to $16.8 million for the three months ended March 31, 2011 primarily due to $2.1 million of higher amortization related to our other intangible assets, $0.9 million charge related to a product recall campaign, and $0.6 million of increased non-cash stock-based compensation expense.

 

**Interest Expense. **Net interest expense decreased $2.7 million to $8.3 million for the three months ended March 31, 2011 from $11.0 million for the three months ended March 31, 2010 due to reduced debt in 2011 compared to 2010.

 

**Market Valuation — Convertible Notes. **In connection with accounting guidance following the emergence from Chapter 11, we recorded the conversion option on our convertible notes at fair value.  Due to the change in fair value of the conversion option, we recorded a charge to income of $50.6 million during 2010.  Since the notes were converted to equity and cancelled during 2010, there is no impact to our 2011 results.

 

**Reorganization Items. **ASC 852 requires the recognition of certain transactions directly related to the reorganization as reorganization expense in the statement of operations. The reorganization gain of $59.3 million for 2010 consisted of $25.0 million professional fees directly related to reorganization and an $84.3 million gain on the discharge and issuance of our debt instruments.

 

***Changes in Financial Condition***

 

At March 31, 2011, we had total assets of $865.1 million, as compared to total assets of $874.1 million at December 31, 2010.  The $9.0 million, or 1.0%, decrease in total assets primarily resulted from changes in working capital.  We define working capital as current assets (excluding cash) less current liabilities.

 

We use working capital and cash flow measures to evaluate the performance of our operations and our ability to meet our financial obligations. We require working capital investment to maintain our position as a leading manufacturer and supplier of commercial vehicle components.  We continue to strive for aligning our working capital investment with our customers’ purchase requirements and our production schedules.

 

The following table summarizes the major components of our working capital as of the periods listed below:

 
| ** **                         | ** ** | **March 31,** | ** ** | **December 31,** | ** ** |
|------------------------------------|------------|--------------------|------------|-----------------------|------------|
| ** **                         | ** ** | **2011**           | ** ** | **2010**              | ** ** |
| Accounts   receivable              |       | $                  | 112,433    |                  | $          | 75,702 |   |
| Inventories                        |       | 64,717             |       | 55,818                |       |
| Deferred   income taxes (current)  |       | 13,061             |       | 13,061                |       |
| Other   current assets             |       | 7,796              |       | 5,457                 |       |
| Accounts   payable                 |       | (64,869            | )          | (55,324               | )          |
| Accrued   payroll and compensation |       | (16,295            | )          | (17,320               | )          |
| Accrued   interest payable         |       | (5,083             | )          | (12,682               | )          |
| Accrued   workers compensation     |       | (6,203             | )          | (6,994                | )          |
| Other   current liabilities        |       | (20,938            | )          | (20,200               | )          |
| Working   Capital                  |       | $                  | 84,619     |                  | $          | 37,518 |   |

 

Significant changes in working capital included:

 

·            an increase in receivables of $36.7 million due to the comparative increase in revenue in the months leading up to the respective period-end dates;

·            an increase in inventory of $8.9 million due to increase in sales demand;

·            an increase of accounts payable of $9.6 million primarily due to the increase in raw material purchases in the months leading up to the respective period-end dates;

 

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·            a decrease in accrued interest payable of $7.6 million primarily due to payment in February 2011 of our semi-annual interest payment for our senior secured notes.

 

**Capital Resources and Liquidity**

 

Our primary sources of liquidity during the three months ended March 31, 2011 were cash reserves.  We believe that cash from operations, existing cash reserves, and our ABL facility will provide adequate funds for our working capital needs, planned capital expenditures and debt service obligations through 2011 and the foreseeable future.  Our ability to fund working capital needs, planned capital expenditures, scheduled semi-annual interest payments, and to comply with all of the financial covenants under the Credit Agreement, depends on our future operating performance and cash flow, which in turn, are subject to prevailing economic conditions and to financial, business and other factors, some of which are beyond our control.

 

As of March 31, 2011, we had $31.7 million of cash plus $59.0 million in availability under our ABL credit facility for total liquidity of $90.7 million.

 

**Operating Activities**

 

Net cash used in operating activities during the three months ended March 31, 2011 amounted to $40.7 million compared to a use of $42.4 million for the period ended March 31, 2010.  The use of cash in 2011 was a result of increased working capital requirements, primarily receivables and inventories, which are expected in an environment of increasing product demand.  The primary drivers of the use in cash during 2010 were $19.3 million of cash payments for reorganization items and $25.5 million of increased working capital assets. During a period of increasing sales demand, our working capital needs also rise.

 

**Investing Activities**

 

Net cash used in investing activities totaled $6.0 million for the three months ended March 31, 2011 compared to a use of $3.7 million for the period ended March 31, 2010.  Our most significant cash outlays for investing activities are the purchases of property, plant and equipment.  During the three months ended March 31, 2011, we had cash inflows of $7.8 million related to the sale of certain assets.  Capital expenditures for 2011 are currently expected to be approximately $35 million to $50 million, which we expect to fund through existing cash reserves or from our ABL facility.

 

**Financing Activities**

 

No cash was used by financing activities for the three months ended March 31, 2011 compared to cash provided of $46.6 million during the period ended March 31, 2010.  Included in the cash amount provided during 2010 are the impacts from the Plan of Reorganization of satisfying our term loan facilities of $305.8 million, our revolving credit facility of $71.7 million, and the DIP loan facility of $25.0 million.  The three months ended March 31, 2010 also included proceeds from the issuance of $140 million of convertible notes and $309.0 million for the new senior term facility.

 

**Bank Borrowing**

 

**Refinancing**

 

On July 29, 2010, we completed an offering of $310.0 million aggregate principal amount of senior secured notes and entered into the ABL Credit Agreement (the “ABL facility”). We used the net proceeds from the offering of the senior secured notes, $15.0 million of borrowings under the ABL facility and cash on hand to refinance our postpetition senior credit facility and to pay related fees and expenses (the “Refinancing”).

 

**The ABL Facility**

 

In connection with the Refinancing, we entered into a new ABL facility.  The ABL facility is a senior secured asset based revolving credit facility in an aggregate principal amount of up to $75.0 million, with the right, subject to certain conditions, to increase the availability under the facility by up to $25.0 million in the aggregate (for a total aggregate availability of $100.0 million). The four-year ABL facility matures on July 29, 2014 and provides for loans and letters of credit in an aggregate amount up to the amount of the facility, subject to meeting certain borrowing base conditions, with sub-limits of up to $10.0 million for swingline loans and $25.0 million to be available for the issuance of letters of credit.

 

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Loans under the ABL facility initially bear interest at an annual rate equal to, at our option, either LIBOR plus 3.75% or Base Rate plus 2.75%, subject to changes based on our leverage ratio as defined in the ABL facility.

 

We must also pay a commitment fee equal to 0.50% per annum to the lenders under the ABL facility if utilization under the facility exceeds 50.0% of the total commitments under the facility and a commitment fee equal to 0.75% per annum if utilization under the facility is less than or equal to 50.0% of the total commitments under the facility. Customary letter of credit fees are also payable as necessary.

 

The obligations under the ABL facility are secured by (i) first-priority liens on substantially all of the Company’s accounts receivable and inventories, subject to certain exceptions and permitted liens (the “ABL Priority Collateral”) and (ii) second-priority liens on substantially all of the Company’s owned real property and tangible and intangible assets other than the ABL Priority Collateral, including all of the outstanding capital stock of our domestic subsidiaries, subject to certain exceptions and permitted liens (the “Notes Priority Collateral”).

 

**Senior Secured Notes**

 

Also in connection the Refinancing, we issued $310.0 million aggregate principal amount of senior secured notes.  Under the terms of the indenture governing the senior secured notes, the senior secured notes bear interest at a rate of 9.5% per year, paid semi-annually in February and August, and mature on August 1, 2018.  Prior to maturity we may redeem the senior secured notes on the terms set forth in the indenture governing the senior secured notes. The senior secured notes are guaranteed by the Guarantors, and the senior secured notes and the related guarantees are secured by first priority liens on the Notes Priority Collateral and second priority liens on the ABL Priority Collateral.  On February 15, 2011, we completed an exchange offer pursuant to which all our outstanding senior secured notes were exchanged for registered securities with identical terms (other than terms related to registration rights) to the senior secured notes issued July 29, 2010.

 

**Restrictive Debt Covenants.**  Our credit documents****(the ABL facility and the indentures governing the senior secured notes) contain operating covenants that limit the discretion of management with respect to certain business matters.  These covenants place significant restrictions on, among other things, the ability to incur additional debt, to pay dividends, to create liens, to make certain payments and investments and to sell or otherwise dispose of assets and merge or consolidate with other entities.  In addition, the ABL facility contains a financial covenant which requires us to maintain a fixed charge coverage ratio during any compliance period, which is anytime when the excess availability is less than or equal to the greater of $10.0 million or 15 percent of the total commitment under the ABL facility.  Due to the amount of our excess availability (as calculated under the ABL facility), the Company is not currently in a compliance period and, we do not have to maintain a fixed charge coverage ratio, although this is subject to change.  We expect to be in compliance with all restrictive debt covenants through the next twelve months.

 

We continue to operate in a challenging economic environment and our ability to maintain liquidity and comply with our debt covenants may be affected by economic or other conditions that are beyond our control and which are difficult to predict.

 

**Off-Balance Sheet Arrangements. **We do not currently have any off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.  From time to time we may enter into operating leases, letters of credit, or take-or-pay obligations related to the purchase of raw materials that would not be reflected in our balance sheet.

 

**Critical Accounting Policies and Estimates. **We have made a number of estimates and assumptions relating to the reporting of results of operations and financial position in the preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America.  Actual results could differ significantly from those estimates under different assumptions and conditions.  We included in our Form 10-K for the year ended December 31, 2010 a discussion of our most critical accounting policies, which are those that have a material impact on our financial condition or operating performance and require management’s most difficult, subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

 

*Cautionary Statements Regarding Forward-Looking Statements*

 

In this report, we have made various statements regarding current expectations or forecasts of future events, which speak only as of the date the statements, are made.  These statements are “forward-looking statements” within the meaning of that term in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  Forward-looking statements are also made from time-to-time in press releases and in oral statements made by the officers of Accuride.  Forward-looking statements are identified by the words “estimate,” “project,” “anticipate,” “will continue,” “will likely

 

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result,” “expect,” “intend,” “believe,” “plan,” “predict” and similar expressions.  Forward looking statements also include, but are not limited to, statements regarding commercial vehicle market recovery, projections of revenue, income, loss, or working capital, capital expenditure levels, ability to mitigate rising raw material costs through increases in selling prices, plans for future operations, financing needs, the ultimate outcome and impact of any litigation involving Accuride, the sufficiency of our capital resources and plans and assumptions relating to the foregoing.

 

Such forward-looking statements are based on assumptions and estimates, which although believed to be reasonable, may turn out to be incorrect.  Therefore, undue reliance should not be placed upon these estimates and statements.  We cannot assure that any of these statements, estimates, or beliefs will be realized and actual results may differ from those contemplated in these “forward-looking statements.”  We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise.  You are advised to consult further disclosures we may make on related subjects in our filings with the SEC.  In addition to other factors discussed in this report, some of the important factors that could cause actual results to differ materially from those discussed in the forward-looking statements include, without limitation, the following:

 

·                  a delayed or less robust than anticipated commercial vehicle industry recovery in 2011 could have a material adverse effect on our business;

·                  the loss of a major customer could have a material adverse effect on our business;

·                  the demands of original equipment manufacturers for price reductions may adversely affect profitability;

·                  we use a substantial amount of raw steel and aluminum and are vulnerable to industry shortages, significant price increases, and surcharges, some of which we may not be able to pass through to our customers;

·                  our credit documents contain significant financial and operating covenants that may limit the discretion of management with respect to certain business matters.  We must also meet certain financial ratios and tests as described above.  Failure to comply with the obligations contained in the debt agreements could result in an event of default, and possibly the acceleration of the related debt and the acceleration of debt under other instruments evidencing debt that may contain cross-acceleration or cross-default provisions;

·                  a labor strike may disrupt our supply to our customer base;

·                  we may encounter increased competition in the future from existing competitors or new competitors;

·                  our significant indebtedness may have important consequences, including, but not limited to, impairment of our ability to obtain additional financing, reduction of funds available for operations and business opportunities or limitations on our ability to dispose of assets;

·                  significant volatility in the foreign currency markets could have an adverse effect on us;

·                  our ability to service our indebtedness is dependent upon operating cash flow;

·                  an interruption of performance of our machinery and equipment could have an adverse effect on us;

·                  an interruption in supply of metals could reduce our ability to obtain favorable sourcing of such raw materials;

·                  we may be subject to liability under certain environmental laws and the cost of compliance with these regulations could have a material adverse effect on our financial condition and may adversely affect our ability to sell or rent such property or to borrow using such property as collateral; and

·                  our success depends largely upon the abilities and experience of certain key management personnel and the loss of the services of one or more of these key personnel could have a negative impact on our business.

 

For further information, refer to the business description and additional risk factors sections included in our Form 10-K for the year ended December 31, 2010, as filed with the SEC.

 

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**Item 3. Quantitative and Qualitative Disclosures about Market Risk**

 

In the normal course of doing business, we are exposed to risks associated with changes in foreign exchange rates, raw material/commodity prices, and interest rates.  We use derivative instruments to manage these exposures.  The objectives for holding derivatives are to minimize the risks using the most effective methods to eliminate or reduce the impacts of these exposures.

 

**Foreign Currency Risk**

 

Certain forecasted transactions, assets, and liabilities are exposed to foreign currency risk. We monitor our foreign currency exposures to maximize the overall effectiveness of our foreign currency derivatives. The principal currency of exposure is the Canadian dollar. From time to time, we use foreign currency financial instruments to offset the impact of the variability in exchange rates on our operations, cash flows, assets and liabilities. At March 31, 2011, we had no open foreign exchange forward contracts.

 

Foreign currency derivative contracts provide only limited protection against currency risks. Factors that could impact the effectiveness of our currency risk management programs include accuracy of sales estimates, volatility of currency markets and the cost and availability of derivative instruments.

 

**Raw Material/Commodity Price Risk**

 

We rely upon the supply of certain raw materials and commodities in our production processes, and we have entered into firm purchase commitments for certain metals and natural gas. Additionally, from time to time, we use commodity price swaps and futures contracts to manage the variability in certain commodity prices on our operations and cash flows. At March 31, 2011, we had no open commodity price swaps or futures contracts.

 

**Interest Rate Risk**

 

We use long-term debt as a primary source of capital. The following table presents the principal cash repayments and related weighted average interest rates by maturity date for our fixed-rate debt at March 31, 2011:

 
| **(Dollars in thousands)** | ** ** | **2011** | ** ** | **2012** | ** ** | **2013** | ** ** | **2014** | ** ** | **2015** | ** ** | **Thereafter** | ** ** | **Total** | ** ** | **Fair   Value** | ** ** |
|--------------------------------------|------------|----------|------------|----------|------------|----------|------------|----------|------------|----------|------------|----------------|------------|-----------|------------|------------------|------------|
| Long-term Debt:                      |       |     |       |     |       |     |       |     |       |     |       |           |       |      |       |             |       |
| Fixed Rate                           |       | —   |       | —   |       | —   |       | —   |       | —   |       | $              | 310,000    |      | $          | 310,000          |       | $ | 344,875 |   |
| Average Rate                         |       | —   |       | —   |       | —   |       | —   |       | —   |       | 9.50           | %          | 9.50      | %          |             |       |
|                                      |            |          |            |          |            |          |            |          |            |          |            |                |            |           |            |                  |            |  |  |  |

 

**Item 4. Controls and Procedures**

 

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.  In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

 

As required by SEC Rule 13a-15(b), we carried out an evaluation, under the supervision and with the participation of the Company’s management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report.  Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

 

***Changes in Internal Control Over Financial Reporting.***  During the first quarter of fiscal 2011 there were no changes to our internal controls over financial reporting that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

 

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**PART II.  OTHER INFORMATION**

 

**Item 1.  Legal Proceedings**

 

Neither Accuride nor any of our subsidiaries is a party to any legal proceeding which, in the opinion of management, would have a material adverse effect on our business or financial condition.  However, we from time-to-time are involved in ordinary routine litigation incidental to our business, including actions related to product liability, contractual liability, intellectual property, workplace safety and environmental claims.  We establish reserves for matters in which losses are probable and can be reasonably estimated.  While we believe that we have established adequate accruals for our expected future liability with respect to our pending legal actions and proceedings, we cannot assure you that our liability with respect to any such action or proceeding would not exceed our established accruals.  Further, we cannot assure that litigation having a material adverse affect on our financial condition will not arise in the future.

 

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**Item 6.  Exhibits**

 
| **Exhibit No.** | ** ** | ** ** | ** ** | **Description**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|----------------------|------------|------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                 |       |       |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 2.1                  |       | —     |       | Agreement   and Plan of Merger, dated as of December 24, 2004, by and among Accuride   Corporation, Amber Acquisition Corp., Transportation Technologies   Industries, Inc., certain signing stockholders and the Company   Stockholders Representatives. Previously filed as an exhibit to the   Form 8-K filed on December 30, 2004 and incorporated herein by   reference.                                                                                                                              |
| 2.2                  |       | —     |       | Amendment   to Agreement and Plan of Merger, dated as of January 28, 2005, by and   among Accuride Corporation, Amber Acquisition Corp., Transportation   Technologies Industries, Inc. certain signing stockholders and the   Company Stockholders Representatives. Previously filed as an exhibit to the   Form 8-K filed on February 4, 2005 and incorporated herein by   reference.                                                                                                                    |
| 2.3                  |       | —     |       | Third   Amended Joint Plan of Reorganization for Accuride Corporation, et al.   Previously filed as an exhibit to the Form 8-K filed on   February 22, 2010, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                   |
| 2.4                  |       | —     |       | Confirmation   Order for Third Amended Plan of Reorganization. Previously filed as an   exhibit to the Form 8-K filed on February 22, 2010, and   incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                  |
| 3.1                  |       | —     |       | Amended   and Restated Certificate of Incorporation of Accuride Corporation. Previously   filed as an exhibit to the Form 8-K (Acc. No. 0001104659-10-012168)   filed on March 4, 2010, and incorporated herein by reference.                                                                                                                                                                                                                                                                                   |
| 3.2                  |       | —     |       | Certificate   of Amendment to the Amended and Restated Certificate of Incorporation.   Previously filed as an exhibit to the Form 8-K (ACC   No. 0001104659-10-059191) filed on November 18, 2010, and   incorporated herein by reference.                                                                                                                                                                                                                                                                      |
| 3.3                  |       | —     |       | Amended   and Restated Bylaws of Accuride Corporation. Previously filed as an exhibit   to the Form 8-K (Acc. No. 0001104659-10-004054) filed on   February 1, 2011, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                      |
| 4.1                  |       | —     |       | Indenture,   dated July 29, 2010, by and among Accuride Corporation, Accuride   Corporation’s domestic subsidiaries, Wilmington Trust FSB, as trustee, and   Deutsche Bank Trust Company Americas, as notes priority collateral agent,   registrar and paying agent, with respect to $310.0 million aggregate   principal amount of 91/2% First Priority Senior Secured Notes due 2018.    Previously filed as an exhibit to Form 8-K filed on August 2, 2010   and incorporated herein by reference. |
| 4.2                  |       | —     |       | Form of   91/2% First Priority Senior Secured Notes due 2018 (included in   Exhibit 4.4).  Previously filed as an exhibit to Form 8-K   filed on August 2, 2010 and incorporated herein by reference                                                                                                                                                                                                                                                                                                  |
| 4.3                  |       | —     |       | Intercreditor   Agreement, dated July 29, 2010, between Deutsche Bank Trust Company   Americas, as initial ABL agent, and Deutsche Bank Trust Company Americas, as   Senior Secured Notes Collateral Agent, and acknowledged by Accuride   Corporation and its domestic subsidiaries.  Previously filed as an   exhibit to Form 8-K filed on August 2, 2010 and incorporated herein   by reference                                                                                                         |
| 4.4                  |       | —     |       | Registration   Rights Agreement, dated February 26, 2010, by and between Accuride   Corporation and each of the Holders party thereto. Previously filed as an   exhibit to the Form 8-K (Acc. No. 0001104659-10-012168) filed on   March 4, 2010 and incorporated herein by reference.                                                                                                                                                                                                                     |
| 4.5                  |       | —     |       | Form of   Warrant. Previously filed as an exhibit to the Form 8-K/A (Acc.   No. 0001104659-10-012546) filed on March 5, 2010 and incorporated   herein by reference.                                                                                                                                                                                                                                                                                                                                       |
| 4.6                  |       | —     |       | Warrant   Agent Agreement, dated February 26, 2010, between Accuride Corporation   and American Stock Transfer and Trust Company LLC. Previously filed as   an exhibit to the Form 8-K (Acc. No. 0001104659-10-012168) filed on   March 4, 2010 and incorporated herein by reference.                                                                                                                                                                                                                 |
| 10.1*†          |       | —     |       | Accuride   Corporation Amended and Restated 2010 Incentive Award Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.2*                |       | —     |       | Form of   Restricted Stock Unit Agreement. Previously filed as an exhibit to the   Form 8-K (Acc. No.  0001104659-11-024183) filed on April 29,   2011 and incorporated herein by reference.                                                                                                                                                                                                                                                                                                               |
| 10.3*                |       | —     |       | Letter   agreement, dated January 14, 2011, between Accuride Corporation and   Richard F. Dauch. Previously filed as an exhibit to Form 8-K filed on   February 1, 2011, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                  |
| 10.4*                |       | —     |       | Severance   and Retention Agreement, dated February 1, 2011, between Accuride   Corporation and Richard F. Dauch. Previously filed as an exhibit to Form 8-K   filed on February 1, 2011, and incorporated herein by reference.                                                                                                                                                                                                                                                                                 |
| 10.5*                |       | —     |       | Release   agreement, dated February 7, 2011, between Accuride Corporation and   Edward J. Gulda                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 31.1†           |       | —     |       | Section 302   Certification of Richard F. Dauch in connection with the Quarterly Report of   Form 10-Q on Accuride Corporation for the period ended March 31,   2011.                                                                                                                                                                                                                                                                                                                                           |
| 31.2†           |       | —     |       | Section 302   Certification of James H. Woodward, Jr. in connection with the Quarterly   Report on Form 10-Q of Accuride Corporation for the period ended   March 31, 2011.                                                                                                                                                                                                                                                                                                                                |
| 32.1††     |       | —     |       | Certifications   Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States   Code.                                                                                                                                                                                                                                                                                                                                                                                                                          |

 

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†              Filed herewith

††            Furnished herewith

*              Management contract or compensatory agreement

 

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**SIGNATURES**

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 
| ACCURIDE CORPORATION                                |   |   |
|-----------------------------------------------------|--------|--------|
|                                                |   |   |
| /s/   RICHARD F. DAUCH                              |   | Dated: | May 6,   2011 |
| Richard   F. Dauch                                  |   |   |   |
| President   and Chief Executive Officer             |   |   |   |
| (Principal   Executive Officer)                     |   |   |   |
|                                                |   |   |   |
|                                                |   |   |   |
| /s/   JAMES H. WOODWARD, Jr.                   |   | Dated: | May 6,   2011 |
| James   H. Woodward, Jr.                       |   |   |   |
| Senior   Vice President and Chief Financial Officer |   |   |   |
| (Principal   Financial Officer)                     |   |   |   |
|                                                |   |   |   |
|                                                |   |   |   |
| /s/   GREGORY A. RISCH                              |   | Dated: | May 6,   2011 |
| Gregory   A. Risch                                  |   |   |
| Vice   President and Chief Accounting Officer       |   |   |
| (Principal   Accounting Officer)                    |   |   |

 

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