Dana Holding Corporation Announces First-Quarter 2016 Financial Results, Significant New Business Growth
Highlights
- Sales of
$1.45 billion - Net income attributable to Dana of
$45 million - Diluted adjusted EPS of
$0.34 - Adjusted EBITDA of
$148 million , providing a margin of 10.2 percent - Significant new business wins
- Affirmed key financial guidance; adjusts capital spending and free cash flow as a result of new business wins
- Acquisition of Magnum Gaskets® completed
- Repurchase of
$28 million of common stock; 70 million shares repurchased or redeemed since program inception
Sales totaled
Net income attributable to Dana for the first quarter of 2016 was
Diluted adjusted earnings per share in the first quarter of 2016 were
Free cash flow for the quarter was a use of
Significant New Business Wins
Dana continues to win new business and grow its sales backlog. Dana has secured driveline content on an all-new compact pick-up truck and SUV program with a global OEM that will be incremental to its backlog beginning in 2019. The company also expects that strong demand for the next-generation Jeep® Wrangler will benefit the sales backlog beginning in late 2018. These two programs are expected to generate an additional
"I am especially pleased by the focus, energy, and commitment that our team members place upon customer satisfaction," said
Business Unit Performance
Light Vehicle Driveline Technologies
Sales were
Segment EBITDA was
Commercial Vehicle Driveline Technologies
Sales were
The commercial-vehicle segment EBITDA for the first quarter was
Off-Highway Driveline Technologies
Sales were
Segment EBITDA was
Power Technologies
Sales were
Segment EBITDA was
"We are off to a good start toward achieving our objectives this year. Our Light Vehicle Driveline and Power Technologies businesses grew organically by 3 percent. First-quarter demand was lower, as expected, in the commercial- and off-highway vehicle markets, but both groups flexed their businesses accordingly," said Mr. Kamsickas. "Our Commercial Vehicle Driveline business has stabilized and continues to improve, leading to enhanced margins from last year's fourth quarter. While a few of our end markets will remain challenging this year, we are taking action to improve operational efficiencies."
2016 Full-Year Financial Targets
The new program wins achieved in this year's first quarter will require additional capital investment during the remainder of the year. Dana has affirmed key financial guidance and has adjusted capital spending and free cash flow targets to reflect this success:
- Sales of
$5.8 to $6.0 billion ; - Adjusted EBITDA of
$640 to $670 million ; - Adjusted EBITDA as a percent of sales of 11.0 to 11.2 percent;
- Diluted adjusted EPS of approximately
$1.65 to $1.75 (excluding the impact of share repurchases afterMarch 31, 2016 ); - Capital spending of
$320 to $340 million ; and - Free cash flow of
$120 to $140 million .
Other New Business Wins
Dana announced last week at Bauma 2016 in
The company also secured major new business in the commercial vehicle market, including a full product line of steer axle modules, drive axle modules, and driveshafts for the 2018 Isuzu FTR, an all-new entry in the Class 6 medium-duty truck segment.
In addition, Dana secured 100 percent of the drive axle housing business on a new truck and bus program for a prominent, global customer in
In
The Power Technologies group also won new business in the North American, European, and Asian markets, including
Company completed acquisition of Magnum Gaskets®
Dana announced in February that it completed the acquisition of Magnum Gaskets,®, a U.S.-based supplier of aftermarket gaskets and sealing products for light- and commercial-vehicle applications. The Magnum Gaskets® brand will enhance Dana's sealing product offerings and complement the company's Victor Reinz® and Glaser® global sealing brands.
Share Repurchase Program
During the first quarter of 2016, the company completed
Dana to Host Conference Call at
Dana will discuss its first-quarter results in a conference call at
An audio recording of the webcast will be available after
Non-GAAP Financial Information
This release refers to adjusted EBITDA, a non-GAAP financial measure, which we have defined as net income before interest, taxes, depreciation, amortization, equity grant expense, restructuring expense and other adjustments not related to our core operations (gain/loss on debt extinguishment, pension settlements or divestitures, impairment, etc.). Adjusted EBITDA is a primary driver of cash flows from operations and a measure of our ability to maintain and continue to invest in our operations and provide shareholder returns. Adjusted EBITDA should not be considered a substitute for income (loss) before income taxes, net income (loss) or other results reported in accordance with GAAP. Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.
Diluted adjusted EPS is a non-GAAP financial measure, which we have defined as adjusted net income divided by adjusted diluted shares. We define adjusted net income as net income (loss) attributable to the parent company, excluding any nonrecurring income tax items, restructuring and impairment expense, amortization expense and other adjustments not related to our core operations (as used in adjusted EBITDA), net of any associated income tax effects. We define adjusted diluted shares as diluted shares as determined in accordance with GAAP based on adjusted net income. This measure is considered useful for purposes of providing investors, analysts and other interested parties with an indicator of ongoing financial performance that provides enhanced comparability to EPS reported by other companies. Diluted adjusted EPS is neither intended to represent nor be an alternative measure to diluted EPS reported under GAAP.
Free cash flow is a non-GAAP financial measure, which we have defined as cash provided by (used in) operating activities, less purchases of property, plant and equipment. We believe this measure is useful to investors in evaluating the operational cash flow of the company inclusive of the spending required to maintain the operations. Free cash flow is neither intended to represent nor be an alternative to the measure of net cash provided by (used in) operating activities reported under GAAP. Free cash flow may not be comparable to similarly titled measures reported by other companies.
Please reference the "Non-GAAP financial information" accompanying our quarterly earnings conference call presentations on our website at www.dana.com/investors for our GAAP results and the reconciliations of these measures, where used, to the comparable GAAP measures.
Forward-Looking Statements
Certain statements and projections contained in this news release are, by their nature, forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on our current expectations, estimates and projections about our industry and business, management's beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "could," "potential," "continue," "ongoing," similar expressions, and variations or negatives of these words. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement.
Dana's Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and other
About
Dana is a global leader in the supply of highly engineered driveline, sealing, and thermal-management technologies that improve the efficiency and performance of vehicles with both conventional and alternative-energy powertrains. Serving three primary markets – passenger vehicle, commercial truck, and off-highway equipment – Dana provides the world's original-equipment manufacturers and the aftermarket with local product and service support through a network of nearly 100 engineering, manufacturing, and distribution facilities. Founded in 1904 and based in
DANA HOLDING CORPORATION |
||||||||
Consolidated Statement of Operations (Unaudited) |
||||||||
For the Three Months Ended March 31, 2016 and 2015 |
||||||||
Three Months Ended |
||||||||
(In millions except per share amounts) |
March 31, |
|||||||
2016 |
2015 |
|||||||
Net sales |
$ |
1,449 |
$ |
1,608 |
||||
Costs and expenses |
||||||||
Cost of sales |
1,250 |
1,380 |
||||||
Selling, general and administrative expenses |
98 |
100 |
||||||
Amortization of intangibles |
2 |
5 |
||||||
Restructuring charges, net |
1 |
1 |
||||||
Loss on extinguishment of debt |
(2) |
|||||||
Other income, net |
1 |
12 |
||||||
Income before interest expense and income taxes |
99 |
132 |
||||||
Interest expense |
27 |
28 |
||||||
Income before income taxes |
72 |
104 |
||||||
Income tax expense |
24 |
31 |
||||||
Equity in earnings of affiliates |
1 |
|||||||
Net income |
48 |
74 |
||||||
Less: Noncontrolling interests net income |
3 |
11 |
||||||
Net income attributable to the parent company |
$ |
45 |
$ |
63 |
||||
Net income per share attributable to the parent company |
||||||||
Basic |
$ |
0.30 |
$ |
0.38 |
||||
Diluted |
$ |
0.30 |
$ |
0.38 |
||||
Weighted-average shares outstanding - Basic |
149.4 |
164.7 |
||||||
Weighted-average shares outstanding - Diluted |
149.9 |
166.0 |
||||||
Cash dividends declared per share |
$ |
0.06 |
$ |
0.05 |
DANA HOLDING CORPORATION |
||||||||||
Consolidated Statement of Comprehensive Income (Unaudited) |
||||||||||
For the Three Months Ended March 31, 2016 and 2015 |
||||||||||
Three Months Ended |
||||||||||
(In millions) |
March 31, |
|||||||||
2016 |
2015 |
|||||||||
Net income |
$ |
48 |
$ |
74 |
||||||
Less: Noncontrolling interests net income |
3 |
11 |
||||||||
Net income attributable to the parent company |
45 |
63 |
||||||||
Other comprehensive income (loss) attributable to |
||||||||||
the parent company, net of tax: |
||||||||||
Currency translation adjustments |
29 |
(99) |
||||||||
Hedging gains and losses |
3 |
(1) |
||||||||
Investment and other gains and losses |
2 |
1 |
||||||||
Defined benefit plans |
7 |
16 |
||||||||
Other comprehensive income (loss) attributable |
||||||||||
to the parent company |
41 |
(83) |
||||||||
Other comprehensive income (loss) attributable to |
||||||||||
noncontrolling interests, net of tax: |
||||||||||
Currency translation adjustments |
1 |
|||||||||
Defined benefit plans |
1 |
|||||||||
Other comprehensive income attributable to |
||||||||||
noncontrolling interests |
1 |
1 |
||||||||
Total comprehensive income (loss) attributable |
||||||||||
to the parent company |
86 |
(20) |
||||||||
Total comprehensive income attributable |
||||||||||
to noncontrolling interests |
4 |
12 |
||||||||
Total comprehensive income (loss) |
$ |
90 |
$ |
(8) |
DANA HOLDING CORPORATION |
|||||||
Consolidated Balance Sheet (Unaudited) |
|||||||
As of March 31, 2016 and December 31, 2015 |
|||||||
(In millions except share and per share amounts) |
March 31, |
December 31, |
|||||
2016 |
2015 |
||||||
Assets |
|||||||
Current assets |
|||||||
Cash and cash equivalents |
$ |
669 |
$ |
791 |
|||
Marketable securities |
164 |
162 |
|||||
Accounts receivable |
|||||||
Trade, less allowance for doubtful accounts of $5 in 2016 and 2015 |
804 |
673 |
|||||
Other |
133 |
115 |
|||||
Inventories |
670 |
625 |
|||||
Other current assets |
123 |
108 |
|||||
Total current assets |
2,563 |
2,474 |
|||||
Goodwill |
91 |
80 |
|||||
Intangibles |
112 |
102 |
|||||
Other noncurrent assets |
342 |
353 |
|||||
Investments in affiliates |
150 |
150 |
|||||
Property, plant and equipment, net |
1,210 |
1,167 |
|||||
Total assets |
$ |
4,468 |
$ |
4,326 |
|||
Liabilities and equity |
|||||||
Current liabilities |
|||||||
Notes payable, including current portion of long-term debt |
$ |
27 |
$ |
22 |
|||
Accounts payable |
795 |
712 |
|||||
Accrued payroll and employee benefits |
130 |
145 |
|||||
Taxes on income |
19 |
19 |
|||||
Other accrued liabilities |
181 |
193 |
|||||
Total current liabilities |
1,152 |
1,091 |
|||||
Long-term debt, less debt issuance costs of $21 in 2016 and 2015 |
1,574 |
1,553 |
|||||
Pension and postretirement obligations |
523 |
521 |
|||||
Other noncurrent liabilities |
335 |
330 |
|||||
Total liabilities |
3,584 |
3,495 |
|||||
Commitments and contingencies |
|||||||
Parent company stockholders' equity |
|||||||
Preferred stock, 50,000,000 shares authorized, $0.01 par value, |
|||||||
no shares outstanding |
- |
- |
|||||
Common stock, 450,000,000 shares authorized, $0.01 par value, |
|||||||
148,074,536 and 150,068,040 shares outstanding |
2 |
2 |
|||||
Additional paid-in capital |
2,313 |
2,311 |
|||||
Accumulated deficit |
(374) |
(410) |
|||||
Treasury stock, at cost (2,412,087 and 23,963 shares) |
(30) |
(1) |
|||||
Accumulated other comprehensive loss |
(1,133) |
(1,174) |
|||||
Total parent company stockholders' equity |
778 |
728 |
|||||
Noncontrolling equity |
106 |
103 |
|||||
Total equity |
884 |
831 |
|||||
Total liabilities and equity |
$ |
4,468 |
$ |
4,326 |
DANA HOLDING CORPORATION |
|||||
Consolidated Statement of Cash Flows (Unaudited) |
|||||
For the Three Months Ended March 31, 2016 and 2015 |
|||||
Three Months Ended |
|||||
(In millions) |
March 31, |
||||
2016 |
2015 |
||||
Operating activities |
|||||
Net income |
$ 48 |
$ 74 |
|||
Depreciation |
41 |
39 |
|||
Amortization of intangibles |
2 |
6 |
|||
Amortization of deferred financing charges |
1 |
1 |
|||
Call premium on senior notes |
2 |
||||
Earnings of affiliates, net of dividends received |
2 |
1 |
|||
Stock compensation expense |
2 |
3 |
|||
Deferred income taxes |
4 |
5 |
|||
Pension contributions, net |
(7) |
(5) |
|||
Change in working capital |
(128) |
(141) |
|||
Other, net |
8 |
(5) |
|||
Net cash used in operating activities (1) |
(27) |
(20) |
|||
Investing activities |
|||||
Purchases of property, plant and equipment (1) |
(71) |
(62) |
|||
Acquisition of business |
(18) |
||||
Purchases of marketable securities |
(12) |
(11) |
|||
Proceeds from sales of marketable securities |
3 |
10 |
|||
Proceeds from maturities of marketable securities |
8 |
6 |
|||
Other |
(2) |
(2) |
|||
Net cash used in investing activities |
(92) |
(59) |
|||
Financing activities |
|||||
Net change in short-term debt |
11 |
6 |
|||
Repayment of letters of credit |
(4) |
||||
Proceeds from long-term debt |
32 |
18 |
|||
Repayment of long-term debt |
(24) |
(56) |
|||
Call premium on senior notes |
(2) |
||||
Dividends paid to common stockholders |
(9) |
||||
Distributions paid to noncontrolling interests |
(1) |
(1) |
|||
Repurchases of common stock |
(28) |
(63) |
|||
Other |
(1) |
(2) |
|||
Net cash used in financing activities |
(20) |
(104) |
|||
Net decrease in cash and cash equivalents |
(139) |
(183) |
|||
Cash and cash equivalents − beginning of period |
791 |
1,121 |
|||
Effect of exchange rate changes on cash balances |
17 |
(53) |
|||
Cash and cash equivalents − end of period |
$ 669 |
$ 885 |
|||
(1) |
Free cash flow of ($98) in 2016 and ($82) in 2015 is net cash provided by (used in) |
||||
operating activities less purchases of property, plant and equipment. |
DANA HOLDING CORPORATION |
||||||
Segment Sales & Segment EBITDA (Unaudited) |
||||||
For the Three Months Ended March 31, 2016 and 2015 |
||||||
Three Months Ended |
||||||
(In millions) |
March 31, |
|||||
2016 |
2015 |
|||||
Sales |
||||||
Light Vehicle |
$ |
613 |
$ |
637 |
||
Commercial Vehicle |
333 |
433 |
||||
Off-Highway |
241 |
284 |
||||
Power Technologies |
262 |
254 |
||||
Total Sales |
$ |
1,449 |
$ |
1,608 |
||
Segment EBITDA |
||||||
Light Vehicle |
$ |
58 |
$ |
64 |
||
Commercial Vehicle |
26 |
35 |
||||
Off-Highway |
32 |
39 |
||||
Power Technologies |
35 |
38 |
||||
Total Segment EBITDA |
151 |
176 |
||||
Corporate expense and other items, net |
(3) |
- |
||||
Adjusted EBITDA |
$ |
148 |
$ |
176 |
DANA HOLDING CORPORATION |
||||||
Reconciliation of Segment and Adjusted EBITDA |
||||||
to Net Income (Unaudited) |
||||||
For the Three Months Ended March 31, 2016 and 2015 |
||||||
Three Months Ended |
||||||
(In millions) |
March 31, |
|||||
2016 |
2015 |
|||||
Segment EBITDA |
$ |
151 |
$ |
176 |
||
Corporate expense and other items, net |
(3) |
|||||
Adjusted EBITDA |
148 |
176 |
||||
Depreciation |
(41) |
(39) |
||||
Amortization of intangibles |
(2) |
(6) |
||||
Restructuring |
(1) |
(1) |
||||
Stock compensation expense |
(2) |
(3) |
||||
Strategic transaction expenses |
(2) |
(1) |
||||
Other items |
(4) |
|||||
Distressed supplier costs |
(1) |
|||||
Amounts attributable to previously divested/closed operations |
1 |
|||||
Gain on derecognition of noncontrolling interest |
5 |
|||||
Loss on extinguishment of debt |
(2) |
|||||
Interest expense, net |
(24) |
(25) |
||||
Income before income taxes |
72 |
104 |
||||
Income tax expense |
24 |
31 |
||||
Equity in earnings of affiliates |
1 |
|||||
Net income |
$ |
48 |
$ |
74 |
DANA HOLDING CORPORATION |
|||||||
Diluted Adjusted EPS (Unaudited) |
|||||||
For the Three Months Ended March 31, 2016 and 2015 |
|||||||
(In millions except per share amounts) |
|||||||
Three Months Ended |
|||||||
March 31, |
|||||||
2016 |
2015 |
||||||
Net income attributable to parent company |
$ |
45 |
$ |
63 |
|||
Restructuring charges (1) |
1 |
1 |
|||||
Amortization of intangibles (1) |
2 |
4 |
|||||
Non-recurring items (1): |
|||||||
Noncontrolling interests adjustment |
4 |
||||||
Loss on extinguishment of debt |
2 |
||||||
Nonrecurring tax expense |
3 |
8 |
|||||
Other items |
1 |
||||||
Adjusted net income |
$ |
51 |
$ |
83 |
|||
Diluted shares - as reported |
150 |
166 |
|||||
Adjusted diluted shares |
150 |
166 |
|||||
Diluted adjusted EPS |
$ |
0.34 |
$ |
0.50 |
|||
(1) Amounts are net of associated tax effect. |
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SOURCE
Jeff Cole, +1-419-887-3535, jeff.cole@dana.com, Investor Contact: Craig Barber, +1-419-887-5166, craig.barber@dana.com