Attached files
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| 8-K - FORM 8-K - DANA INC | l42421e8vk.htm |
Exhibit 99.1
Dana Holding Corporation Reports First-Quarter Results and Raises Full-Year Guidance
| • | Strong momentum continues with adjusted EBITDA of $181 million and revenues of $1.8 billion | ||
| • | Income of $23 million, excluding $53 million of charges related to restructuring debt | ||
| • | Expanding operations in emerging markets and new product introductions support growth targets | ||
| • | Roger Wood joins Dana as CEO | ||
| • | New agreements reached with UAW and USW |
MAUMEE, Ohio — April 27, 2011 — Dana Holding Corporation (NYSE: DAN) today reported its
first-quarter 2011 financial results, including adjusted EDITDA of $181 million. The company had a
net loss of $30 million in the quarter, which included $53 million of one-time charges associated
with the refinancing and restructuring of debt in January. Excluding these charges, Dana posted
first-quarter net income of $23 million.
Strong sales of $1.8 billion — up nearly 20 percent over the first quarter of 2010 — and
continued operating improvements enabled the company to achieve an adjusted EBITDA margin of 10.1
percent. Diluted adjusted earnings per share in the quarter were $0.34, compared to $0.06 in the
prior-year period.
“Dana had another strong quarter as we took decisive steps to expand our global footprint and
product offerings,” said Dana Executive Chairman John Devine. “We have significantly improved the
building blocks for continued growth by reaching an early agreement with our labor unions,
restructuring our balance sheet, and strategically investing in key markets.”
Free cash flow use of $35 million in the quarter was driven by increased working capital
requirements associated with the higher level of sales. Global liquidity continues to exceed $1.1
billion. The company’s strong balance sheet, cash position, and financial flexibility are
supporting its aggressive, long-term growth plans in emerging markets and the development of new
drivetrain, sealing, and thermal technologies.
Recovering Markets
The light and commercial vehicle markets continue to improve. Light vehicle production was up 5
percent globally and 14 percent in North America compared to the same period last year. Commercial
vehicle production in the quarter was up 41 percent in North America.
The off-highway market also reflects growth year-over-year. Strength in mining and construction
equipment continues, and agriculture equipment production has benefited from strong commodity
prices and increasing farm income.
Growing Presence in Emerging Markets
Dana recently announced it has signed a definitive agreement with Axles India, Ltd. (AIL), to
acquire select assets of AIL’s commercial truck axle business. This $13 million transaction is
consistent with the company’s growth objectives for Asia, and is expected to generate approximately
$50 million in annual revenue in India’s commercial vehicle market, which is growing at a compound
annual rate of 8 percent. Key customers of this business are Ashok Leyland and Mahindra &
Mahindra.
In January, Dana agreed to increase ownership of its joint venture, Dongfeng Dana Axle Co., Ltd.
(DDAC), to 50 percent, pending government approval, in the rapidly growing Chinese market. In
February, Dana completed a strategic agreement with SIFCO S.A., adding front steer axles to its
product portfolio in South America, bringing its total annual sales in the region to more than $1
billion.
New Labor Agreements Reached Early
As previously announced, Dana reached new three-year international labor agreements with the United
Auto Workers (UAW) and United Steel Workers (USW), effective June 1, 2011. The agreements were
ratified in late March by members of both unions at 20 facilities in the United States and support
the company’s continued drive for leaner, more competitive operations.
Reaching new agreements nearly 10 weeks before the current contracts expire has also enabled the
company and its employees to remain focused on the needs of customers.
Product Technology and Quality
Other product-related highlights from the first quarter that support Dana’s growth objectives
include:
| • | The company’s global production facilities achieved world-class performance in the area of product quality delivered to customers, with an aggregate single-digit PPM (defective parts per million) score — a company best; | ||
| • | Dana introduced two new products to the commercial vehicle market: the Spicer® Pro-40™ family of tandem drive axles for heavy-duty trucks, which offers fuel efficiency improvements through significant weight reduction and improved power density, and the Spicer LMSi™ hub system, which improves driveline reliability and maintenance intervals; | ||
| • | Dana and Bosch Rexroth AG introduced a new hydro-mechanical variable powersplit transmission (HVT) system to the off-highway industry, which has demonstrated fuel savings of more than 20 percent on front-end loaders when compared with the same vehicle outfitted with a conventional torque converter transmission; and | ||
| • | Dana’s operation in South Africa was honored by Toyota Motor Corporation with a supplier achievement award for improving the manufacture of Spicer axles for the Toyota Hilux pickup truck. |
New CEO Named
Roger J. Wood joined Dana earlier this month as president and chief executive officer; he has also
been elected to the company’s board of directors. He had been an executive vice president and
group president at BorgWarner Inc., where he worked for 26 years in a wide range of
responsibilities and leadership roles in manufacturing, strategy, and operations.
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“Dana’s global footprint, quality momentum, and growing cadence of product innovations all provide
a great foundation on which to keep winning new business — and delivering more value to our
customers and shareholders,” Wood said.
Increased Sales and Earnings Guidance for 2011
Dana updated its assumptions and earnings guidance for 2011:
| • | 2011 revenues are now forecast to increase more than 20 percent over 2010 versus the previous forecast of more than 17 percent growth; | ||
| • | Adjusted EBITDA is now projected to be $755 million to $775 million versus the previous guidance of $740 million to $760 million; adjusted EBITDA as a percent of sales is still forecast to be more than 10 percent; | ||
| • | Diluted adjusted earnings per share are expected to total $1.55 to $1.65 per share compared to earlier guidance of $1.50 to $1.60 per diluted adjusted share; and | ||
| • | Free cash flow for the year is projected at more than $175 million versus the previous guidance of greater than $150 million. |
Dana to Host First-Quarter Conference Call at 11 a.m. Today
Dana will discuss its first-quarter results in a conference call at 11 a.m. EDT today.
Participants may listen to the audio portion of the conference call either through audio streaming
online or by telephone. Slide viewing is available online via a link provided on the Dana Investor
Web site. To participate in the Dana Holding Corporation Financial Webcast and Conference Call
from the U.S., dial 1-888-311-4590 (Conference I.D. # 59289629); outside the U.S. dial
1-706-758-0054 (Conference I.D. # 59289629). Phone registration will be available beginning at 10
a.m. EDT. An audio recording of the call will be available after 5 p.m. To access this recording,
dial 1-800-642-1687 (U.S. or Canada) or 1-706-645-9291 (international) and enter Conference I.D. #
59289629. A webcast replay will also be available after 5 p.m. today, and may be accessed via the
Dana Investor Web site.
Non-GAAP Measures
Adjusted EBITDA is a non-GAAP financial measure that we have defined as earnings before interest,
taxes, depreciation, amortization, non-cash equity grant expense, restructuring expense, and other
nonrecurring items (e.g. gain/loss on debt extinguishment or divestitures, impairment, etc.). The
most significant impact on Dana’s ongoing results of operations as a result of applying fresh start
accounting following our emergence from bankruptcy was higher depreciation and amortization. By
using adjusted EBITDA, a performance measure that excludes depreciation and amortization, the
comparability of results is enhanced. Management also believes that adjusted EBITDA is an
important measure since the financial covenants in our debt agreements are based, in part, on
adjusted EBITDA. 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.
Free cash flow is a non-GAAP financial measure that we have defined as cash provided by (used in)
operating activities, excluding any bankruptcy claim-related payments, 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
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reported under GAAP. Free cash flow 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 restructuring expense, amortization expense and
nonrecurring items (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.
The financial information accompanying this release provides reconciliations of adjusted EBITDA,
free cash flow, and diluted adjusted EPS to the most directly comparable financial measures
calculated and presented in accordance with GAAP.
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 Securities and Exchange Commission filings discuss important risk
factors that could affect our business, results of operations and financial condition. The
forward-looking statements in this news release speak only as of this date. Dana does not undertake
any obligation to revise or update publicly any forward-looking statement for any reason.
About Dana Holding Corporation
Dana is a world leader in the supply of driveline products (axles, driveshafts, and transmissions),
power technologies (sealing and thermal-management products), and genuine service parts for light-
and heavy-duty vehicle manufacturers. The company’s customer base includes nearly every major
vehicle manufacturer in the global automotive, commercial vehicle, and off-highway markets. Based
in Maumee, Ohio, the company employs approximately 22,500 people in 26 countries and reported 2010
sales of $6.1 billion. For more information, please visit www.dana.com.
Investor Contact
|
Media Contact | |
Lillian Etzkorn: 419.887.5160
|
Chuck Hartlage: 419.887.5123 |
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DANA HOLDING CORPORATION
Consolidated Statement of Operations (Unaudited)
For the Three Months Ended March 31, 2011 and 2010
Consolidated Statement of Operations (Unaudited)
For the Three Months Ended March 31, 2011 and 2010
| Three Months Ended | ||||||||
| March 31, | ||||||||
| (In millions except per share amounts) | 2011 | 2010 | ||||||
Net sales |
$ | 1,800 | $ | 1,508 | ||||
Costs and expenses |
||||||||
Cost of sales |
1,585 | 1,368 | ||||||
Selling, general and administrative expenses |
99 | 102 | ||||||
Amortization of intangibles |
17 | 15 | ||||||
Restructuring charges, net |
30 | 19 | ||||||
Other expense, net |
48 | 13 | ||||||
Income (loss) before interest and income taxes |
21 | (9 | ) | |||||
Interest expense |
19 | 26 | ||||||
Income (loss) before income taxes |
2 | (35 | ) | |||||
Income tax benefit (expense) |
(31 | ) | 3 | |||||
Equity in earnings of affiliates |
4 | 2 | ||||||
Net loss |
(25 | ) | (30 | ) | ||||
Less: Noncontrolling interests net income |
5 | 1 | ||||||
Net loss attributable to the parent company |
(30 | ) | (31 | ) | ||||
Preferred stock dividend requirements |
8 | 8 | ||||||
Net loss available to common stockholders |
$ | (38 | ) | $ | (39 | ) | ||
Net loss per share available to parent
company common stockholders: |
||||||||
Basic |
$ | (0.26 | ) | $ | (0.28 | ) | ||
Diluted |
$ | (0.26 | ) | $ | (0.28 | ) | ||
Weighted-average common shares outstanding |
||||||||
Basic |
145 | 140 | ||||||
Diluted |
145 | 140 | ||||||
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DANA HOLDING CORPORATION
Consolidated Balance Sheet (Unaudited)
As of March 31, 2011 and December 31, 2010
Consolidated Balance Sheet (Unaudited)
As of March 31, 2011 and December 31, 2010
| March 31, | December 31, | |||||||
| (In millions except share and per share amounts) | 2011 | 2010 | ||||||
Assets |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | 837 | $ | 1,134 | ||||
Accounts receivable |
||||||||
Trade, less allowance for doubtful accounts
of $11 in 2011 and 2010 |
1,074 | 816 | ||||||
Other |
169 | 184 | ||||||
Inventories |
764 | 708 | ||||||
Other current assets |
113 | 91 | ||||||
Total current assets |
2,957 | 2,933 | ||||||
Goodwill |
110 | 104 | ||||||
Intangibles |
468 | 352 | ||||||
Investments and other assets |
259 | 238 | ||||||
Investments in affiliates |
127 | 121 | ||||||
Property, plant and equipment, net |
1,377 | 1,351 | ||||||
Total assets |
$ | 5,298 | $ | 5,099 | ||||
Liabilities and equity |
||||||||
Current liabilities |
||||||||
Notes payable, including current portion of long-term debt |
$ | 49 | $ | 167 | ||||
Accounts payable |
985 | 779 | ||||||
Accrued payroll and employee benefits |
140 | 144 | ||||||
Accrued restructuring costs |
41 | 28 | ||||||
Taxes on income |
50 | 38 | ||||||
Other accrued liabilities |
252 | 251 | ||||||
Total current liabilities |
1,517 | 1,407 | ||||||
Long-term debt |
834 | 780 | ||||||
Pension and postretirement obligations |
751 | 740 | ||||||
Other noncurrent liabilities |
384 | 388 | ||||||
Total liabilities |
3,486 | 3,315 | ||||||
Commitments and contingencies |
||||||||
Parent company stockholders’ equity |
||||||||
Preferred stock, 50,000,000 shares authorized |
||||||||
Series A, $0.01 par value, 2,500,000 shares outstanding |
242 | 242 | ||||||
Series B, $0.01 par value, 5,221,199 and 5,311,298
shares outstanding |
511 | 520 | ||||||
Common stock, $.01 par value, 450,000,000 shares authorized,
146,182,124 and 144,126,032 outstanding |
1 | 1 | ||||||
Additional paid-in capital |
2,630 | 2,613 | ||||||
Accumulated deficit |
(1,229 | ) | (1,191 | ) | ||||
Treasury stock, at cost (458,053 and 379,631 shares) |
(6 | ) | (4 | ) | ||||
Accumulated other comprehensive loss |
(439 | ) | (496 | ) | ||||
Total parent company stockholders’ equity |
1,710 | 1,685 | ||||||
Noncontrolling equity |
102 | 99 | ||||||
Total equity |
1,812 | 1,784 | ||||||
Total liabilities and equity |
$ | 5,298 | $ | 5,099 | ||||
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DANA HOLDING CORPORATION
Consolidated Statement of Cash Flows (Unaudited)
For the Three Months Ended March 31, 2011 and 2010
Consolidated Statement of Cash Flows (Unaudited)
For the Three Months Ended March 31, 2011 and 2010
| Three Months Ended | ||||||||
| March 31, | ||||||||
| (In millions) | 2011 | 2010 | ||||||
Cash flows — operating activities |
||||||||
Net loss |
$ | (25 | ) | $ | (30 | ) | ||
Depreciation |
55 | 62 | ||||||
Amortization of intangibles |
21 | 19 | ||||||
Amortization of deferred financing charges and original issue discount |
3 | 8 | ||||||
Loss on sale of business |
5 | |||||||
Loss on extinguishment of debt |
53 | 4 | ||||||
Deferred income taxes |
5 | (11 | ) | |||||
Pension expense in excess of contributions |
4 | 5 | ||||||
Change in working capital |
(120 | ) | (21 | ) | ||||
Other, net |
2 | 4 | ||||||
Net cash flows provided by (used in) operating activities (1) |
(2 | ) | 45 | |||||
Cash flows — investing activities |
||||||||
Purchases of property, plant and equipment (1) |
(33 | ) | (11 | ) | ||||
Acquisition of business |
(150 | ) | ||||||
Proceeds from sale of businesses |
15 | 113 | ||||||
Other |
(9 | ) | 1 | |||||
Net cash flows provided by (used in) investing activities |
(177 | ) | 103 | |||||
Cash flows — financing activities |
||||||||
Net change in short-term debt |
13 | 9 | ||||||
Proceeds from long-term debt |
753 | 1 | ||||||
Repayment of long-term debt |
(870 | ) | (78 | ) | ||||
Deferred financing payments |
(25 | ) | ||||||
Dividends paid to noncontrolling interests |
(2 | ) | (1 | ) | ||||
Other |
5 | (1 | ) | |||||
Net cash flows used in financing activities |
(126 | ) | (70 | ) | ||||
Net increase (decrease) in cash and cash equivalents |
(305 | ) | 78 | |||||
Cash and cash equivalents — beginning of period |
1,134 | 947 | ||||||
Effect of exchange rate changes on cash balances |
8 | 1 | ||||||
Cash and cash equivalents — end of period |
$ | 837 | $ | 1,026 | ||||
| (1) | Free cash flow of ($35) in 2011 and $34 in 2010 is the sum of net cash provided by (used in) operating activities reduced by the purchases of property, plant and equipment. |
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DANA HOLDING CORPORATION
Segment Sales & Segment EBITDA (Unaudited)
For the Three Months Ended March 31, 2011 and 2010
Segment Sales & Segment EBITDA (Unaudited)
For the Three Months Ended March 31, 2011 and 2010
| Three Months Ended | ||||||||
| March 31, | ||||||||
| (In millions) | 2011 | 2010 | ||||||
SALES |
||||||||
Light Vehicle Driveline |
$ | 673 | $ | 548 | ||||
Power Technologies |
267 | 228 | ||||||
Commercial Vehicle |
475 | 331 | ||||||
Off-Highway |
373 | 257 | ||||||
Structures |
11 | 144 | ||||||
Other |
1 | |||||||
Total Sales |
$ | 1,800 | $ | 1,508 | ||||
Segment EBITDA |
||||||||
Light Vehicle Driveline |
$ | 66 | $ | 42 | ||||
Power Technologies |
40 | 27 | ||||||
Commercial Vehicle |
43 | 24 | ||||||
Off-Highway |
41 | 21 | ||||||
Structures |
11 | |||||||
Total Segment EBITDA |
190 | 125 | ||||||
Corporate expense and other items, net |
(9 | ) | (17 | ) | ||||
Adjusted EBITDA |
$ | 181 | $ | 108 | ||||
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DANA HOLDING CORPORATION
Reconciliation of Segment and Adjusted EBITDA to
Income (Loss) Before Income Taxes (Unaudited)
For the Three Months Ended March 31, 2011 and 2010
Reconciliation of Segment and Adjusted EBITDA to
Income (Loss) Before Income Taxes (Unaudited)
For the Three Months Ended March 31, 2011 and 2010
| Three Months Ended | ||||||||
| March 31, | ||||||||
| (In millions) | 2011 | 2010 | ||||||
Segment EBITDA |
$ | 190 | $ | 125 | ||||
Corporate expense and other items, net |
(9 | ) | (17 | ) | ||||
Adjusted EBITDA |
181 | 108 | ||||||
Depreciation |
(55 | ) | (62 | ) | ||||
Amortization of intangibles |
(21 | ) | (19 | ) | ||||
Restructuring |
(30 | ) | (19 | ) | ||||
Loss on extinguishment of debt |
(53 | ) | (4 | ) | ||||
Other expenses |
(4 | ) | ||||||
Loss on sale of assets, net |
(1 | ) | (5 | ) | ||||
Stock compensation expense |
(2 | ) | (2 | ) | ||||
Foreign exchange on intercompany loans,
Venezuelan currency devaluation and
market value adjustments on forwards |
(1 | ) | (12 | ) | ||||
Interest expense |
(19 | ) | (26 | ) | ||||
Interest income |
7 | 6 | ||||||
Income (loss) before income taxes |
$ | 2 | $ | (35 | ) | |||
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DANA HOLDING CORPORATION
Diluted Adjusted EPS
For the Three Months Ended March 31, 2011 and 2010
Diluted Adjusted EPS
For the Three Months Ended March 31, 2011 and 2010
| Three Months Ended | ||||||||
| March 31, | ||||||||
| (In millions except per share amounts) | 2011 | 2010 | ||||||
Net loss attributable to parent company |
$ | (30 | ) | $ | (31 | ) | ||
Restructuring charges (1) |
18 | 18 | ||||||
Amortization of intangibles (1) |
29 | 18 | ||||||
Non-recurring items (1) |
56 | 8 | ||||||
Adjusted net income |
$ | 73 | $ | 13 | ||||
Diluted shares — as reported |
145 | 140 | ||||||
Potentially dilutive shares |
4 | 6 | ||||||
Conversion of preferred stock |
65 | 66 | ||||||
Adjusted diluted shares |
214 | 212 | ||||||
Diluted adjusted EPS |
$ | 0.34 | $ | 0.06 | ||||
| (1) | Amounts are net of associated tax effect. |
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