Dana Reports First-Quarter 2013 Results, Affirms 2013 Earnings Outlook

-- Sales of $1.68 billion

-- Net income of $42 million

-- Adjusted EBITDA of $158 million, 9.4 percent of sales

-- Free cash flow use of $44 million

-- Financial results in line with Company expectations

-- Share Repurchase Program continues

Apr 25, 2013, 07:00 ET from Dana Holding Corporation

MAUMEE, Ohio, April 25, 2013 /PRNewswire/ -- Dana Holding Corporation (NYSE: DAN) today announced results for the first quarter of 2013.  Sales were $1.68 billion, compared with $1.96 billion for the same period in 2012.  Lower market volumes, principally the North American commercial vehicle and European and Asian off-highway markets, reduced year-over year sales by about $159 million, with light-vehicle program roll-offs and a divestiture a year ago reducing sales by an additional $101 million.

In line with reduced sales, net income for the quarter was $42 million, compared with $70 million for the same period in 2012, and the company's diluted adjusted earnings per share (EPS) was $0.28, compared with $0.44 in the first quarter of 2012.

Adjusted EBITDA for the quarter was $158 million, compared with $212 million for the prior-year period. The reduction was driven mostly by lower sales volumes, which accounted for about $44 million of the decrease.  In addition, the devaluation of the Venezuelan bolivar in February further reduced adjusted EBITDA in the Light Vehicle Driveline segment by $11 million, representing a margin impact of 70 basis points in the quarter.  The company implemented recovery actions and expects to offset the majority of this impact over the remainder of 2013. These factors were partially offset by improved pricing and cost performance in the quarter. 

Overall, adjusted EBITDA as a percent of sales for the quarter was 9.4 percent (10.1 percent excluding the Venezuelan currency devaluation), compared with 10.7 percent for the same period in 2012 and 9.6 percent in the fourth quarter of 2012.

Free cash flow was a use of $44 million in the quarter principally reflecting seasonal working capital outflows of $98 million, semi-annual interest payments on the company's unsecured senior notes of $30 million and capital spending of $29 million. This compares with $37 million during the first quarter of 2012, excluding a one-time voluntary contribution of $150 million to Dana's U.S. pension plans.

"Demand levels in a number of our key markets provided a bit of a headwind for us in the first quarter, but overall results were in line with our expectations.  We continue to achieve solid margins in spite of challenging market conditions by focusing on those levers within our control," said company President and Chief Executive Officer Roger J. Wood.  "Three of our four businesses improved EBITDA margins over last year's fourth quarter, further evidencing our continued focus on cost flexibility and contribution margins." 

The company purchased about 1.4 million shares at a cost of about $24 million under its share repurchase program during the quarter.  Since the board of directors authorized the program in October, Dana has repurchased about 3.6 million shares of common stock through April 23, resulting in $58 million being returned to shareholders.  In addition, the board declared a common stock dividend of $0.05 per share payable May 31 to shareholders of record as of May 10.  These actions demonstrate Dana's commitment to returning value to its shareholders.

Company Affirms 2013 Financial Targets Dana affirmed its financial targets for full-year 2013:

  • Sales of approximately $7.1 billion,
  • Adjusted EBITDA of $800 million to $820 million,
  • Adjusted EBITDA as a percent of sales of approximately 11.4 percent, 
  • Diluted adjusted EPS of $1.88 to $1.95 (excluding the impact of Dana's share repurchase program),
  • Capital spending of $180 million to $200 million, and
  • Free cash flow of $240 million to $260 million.

"We expect to capitalize on improved volumes through the remainder of the year.  In particular, the performance of our Commercial Vehicle Driveline business is dependent on an expected uptick in market demand, and we are closely watching releases from our customers," Mr. Wood said.  "By continuing to maintain our operational flexibility and executing our business model, we are confident in our ability to drive margins commensurate with top line growth."

Dana Earns PACE Awards Dana earned a 2013 Automotive News PACE Award for its innovative Spicer® Diamond Series™ driveshaft.  This industry-first one-piece aluminum driveshaft utilizes Dana's advanced proprietary manufacturing processes to significantly reduce weight by up to 40 percent while maintaining the strength of an all-steel system.  The result is a very robust and significantly lighter driveshaft for improved fuel efficiency and load-carrying capacity.

This driveshaft eliminates the need for a center bearing, helping to reduce component complexity and weight by up to 100 pounds.  Additionally, the Spicer® Diamond Series™ driveshaft requires no exterior tube painting and eliminates the metal inert gas (MIG) welding process, helping to reduce emissions during manufacturing.

New Technologies Introduced Dana introduced a number of new products in the first quarter aimed at targeting specific market-value drivers, such as fuel economy, emissions control, and total cost of ownership. These technology solutions include:

  • Best-in-class Spicer® AdvanTEK® 40 tandem axles for line-haul Class 8 trucks that improve fuel efficiency and reduce total cost of ownership;
  • Enhanced Spicer Life Series® driveshafts capable of handling greater torque capacities than any other driveshaft in the class;
  • Spicer® EconoTrek™ tandem axles that reduce weight by up to 450 pounds, delivering between a 2 and 3 percent improvement in fuel efficiency;
  • Spicer® electric-vehicle gearbox with an optimized gear ratio that provides increased acceleration, enabling drivers to reach highway speeds more quickly; and
  • A new Spicer® TE30 powershift transmission that provides reach stackers and heavy-duty forklift trucks with greater fuel economy and lower cost of ownership.

New Technical Research Center Opens in China Dana also celebrated the opening of its new 129,000 square-foot technical center in Wuxi, Jiangsu Province, China. The Dana China Technical Center provides advanced product and applications engineering for original-equipment manufacturers in the light-vehicle, commercial-vehicle, and off-highway markets in China and throughout the Asia-Pacific region.

Conference Call Scheduled for 10 a.m. EDT Today Dana will discuss its first-quarter results in a conference call at 10 a.m. EDT today.  Participants may listen to the conference call via audio streaming online or telephone. Slide viewing is available via Dana's investor website – www.dana.com/investorsUnited States and Canadian locations should dial 888-311-4590 and international locations should call 706-758-0054, and enter 31782394.  Please ask for the "Dana Holding Corporation Financial Webcast and Conference Call."  Phone registration will be available starting at 9:30 a.m. 

An audio recording of the webcast will be available after 5 p.m. today; dial 855-859-2056 (U.S. or Canada) or 404-537-3406 (international) and enter 31782394.  A webcast replay will be available after 5 p.m. today, and may be accessed via Dana's investor website.

Non-GAAP Financial Information This release refers to adjusted EBITDA, which we have defined to be earnings before interest, taxes, depreciation, amortization, equity grant expense, restructuring expense and other nonrecurring items (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.

Diluted adjusted EPS is a non-GAAP financial measure that 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.

Free cash flow is a non-GAAP financial measure that 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 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-leading supplier of driveline, sealing, and thermal-management technologies that improve the efficiency and performance of passenger, commercial, and off-highway vehicles with both conventional and alternative-energy powertrains.  The company's global network of engineering, manufacturing, and distribution facilities provides original-equipment and aftermarket customers with local product and service support.  Based in Maumee, Ohio, Dana employs more than 23,000 people in 26 countries and reported 2012 sales of $7.2 billion.  For more information, please visit www.dana.com.

 DANA HOLDING CORPORATION 

 Consolidated Statement of Operations (Unaudited) 

 For the Three Months Ended March 31, 2013 and 2012 

Three Months Ended

 (In millions except per share amounts) 

March 31, 

2013

2012

 Net sales 

$      1,676

$      1,964

 Costs and expenses 

     Cost of sales 

1,462

1,698

     Selling, general and administrative expenses 

103

113

     Amortization of intangibles 

19

19

     Restructuring charges, net 

2

5

     Other income (expense), net 

2

(1)

 Income from continuing operations before 

     interest expense and income taxes 

92

128

 Interest expense 

21

21

 Income from continuing operations before 

     income taxes 

71

107

 Income tax expense 

27

37

 Equity in earnings of affiliates 

4

4

 Income from continuing operations 

48

74

 Income (loss) from discontinued operations 

2

(1)

 Net income 

50

73

     Less: Noncontrolling interests net income 

8

3

 Net income attributable to the parent company 

42

70

 Preferred stock dividend requirements 

8

8

 Net income available to common stockholders 

$            34

$            62

 Net income per share available to parent 

     company common stockholders: 

    Basic: 

         Income from continuing operations 

$        0.22

$        0.43

         Income (loss) from discontinued operations 

$        0.01

$      (0.01)

         Net income 

$        0.23

$        0.42

    Diluted: 

         Income from continuing operations 

$        0.18

$        0.33

         Income from discontinued operations 

$        0.01

$              -

         Net income 

$        0.19

$        0.33

 Weighted-average common shares outstanding 

    Basic 

148.0

147.5

    Diluted 

214.4

214.7

Dividends declared per common share

$        0.05

$        0.05

 

 DANA HOLDING CORPORATION 

 Consolidated Statement of Comprehensive Income (Unaudited) 

 For the Three Months Ended March 31, 2013 and 2012 

Three Months Ended

 (In millions) 

March 31, 

2013

2012

 Net income 

$            50

$            73

 Less: Noncontrolling interests net income 

8

3

 Net income attributable to the parent company 

42

70

 Other comprehensive income (loss) attributable to  

   the parent company, net of tax: 

Currency translation adjustments

(17)

44

Unrealized hedging gains and losses

3

8

Unrealized investment and other gains and losses

1

2

Defined benefit plans

8

2

Other comprehensive income (loss) attributable

to the parent company

(5)

56

 Other comprehensive income (loss) attributable to 

   noncontrolling interests, net of tax: 

Currency translation adjustments

(2)

1

Other comprehensive income (loss) attributable

to noncontrolling interests

(2)

1

Total comprehensive income attributable

to the parent company

37

126

Total comprehensive income attributable

to noncontrolling interests

6

4

Total comprehensive income

$            43

$         130

 

 DANA HOLDING CORPORATION 

 Consolidated Balance Sheet (Unaudited) 

 As of March 31, 2013 and December 31, 2012 

 (In millions except share and per share amounts) 

March 31, 

December 31, 

 Assets 

2013

2012

 Current assets 

 Cash and cash equivalents 

$                981

$          1,059

 Marketable securities 

63

60

 Accounts receivable 

Trade, less allowance for doubtful accounts 

of $9 in 2013 and $8 in 2012 

980

818

Other 

231

170

 Inventories 

776

742

 Other current assets 

126

104

Total current assets 

3,157

2,953

 Goodwill 

99

101

 Intangibles 

303

325

 Other noncurrent assets 

258

324

 Investments in affiliates 

208

202

 Property, plant and equipment, net 

1,209

1,239

Total assets 

$             5,234

$          5,144

 Liabilities and equity 

 Current liabilities 

 Notes payable, including current portion of long-term debt 

$                  84

$              101

 Accounts payable 

914

766

 Accrued payroll and employee benefits 

136

160

 Accrued restructuring costs 

23

23

 Taxes on income 

69

63

 Other accrued liabilities 

180

197

Total current liabilities 

1,406

1,310

 Long-term debt 

839

803

 Pension and postretirement obligations 

681

715

 Other noncurrent liabilities 

360

368

Total liabilities 

3,286

3,196

 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 shares outstanding 

511

511

 Common stock, $0.01 par value, 450,000,000 shares authorized, 

147,368,839 and 148,264,067 outstanding 

2

2

Additional paid-in capital 

2,680

2,668

Accumulated deficit 

(736)

(762)

Treasury stock, at cost (3,344,863 and 1,797,988 shares) 

(51)

(25)

Accumulated other comprehensive loss 

(801)

(793)

Total parent company stockholders' equity 

1,847

1,843

 Noncontrolling equity 

101

105

Total equity 

1,948

1,948

Total liabilities and equity 

$             5,234

$          5,144

 

 DANA HOLDING CORPORATION 

 Consolidated Statement of Cash Flows (Unaudited) 

 For the Three Months Ended March 31, 2013 and 2012 

Three Months Ended

 (In millions) 

March 31, 

2013

2012

 Operating activities 

 Net income 

$            50

$            73

 Depreciation 

42

49

 Amortization of intangibles 

22

22

 Amortization of deferred financing charges 

1

1

 Unremitted earnings of affiliates 

(4)

(3)

 Stock compensation expense 

5

7

 Deferred income taxes 

(2)

2

 Pension contributions, net 

(16)

(165)

 Change in working capital 

(109)

(137)

 Other, net 

(4)

(2)

 Net cash flows used in operating activities (1) 

(15)

(153)

 Investing activities 

 Purchases of property, plant and equipment (1) 

(29)

(34)

 Acquisition of business 

(4)

 Other 

1

(2)

 Net cash flows used in investing activities 

(32)

(36)

 Financing activities 

 Net change in short-term debt 

(3)

20

 Proceeds from long-term debt 

53

16

 Repayment of long-term debt 

(30)

(3)

 Dividends paid to preferred stockholders 

(8)

(8)

 Dividends paid to common stockholders 

(7)

 Distributions paid to noncontrolling interests 

(1)

 Repurchases of common stock 

(24)

 Payments to acquire noncontrolling interests 

(7)

 Other 

1

 Net cash flows provided by (used in) financing activities    

(20)

19

 Net decrease in cash and cash equivalents 

(67)

(170)

 Cash and cash equivalents − beginning of period 

1,059

931

 Effect of exchange rate changes on cash balances 

(11)

12

 Cash and cash equivalents − end of period 

$         981

$         773

(1) Free cash flow of $(44) in 2013 and $(187) in 2012 is the sum of net cash used in 

      operating activities reduced by the purchases of property, plant and equipment.

 

 DANA HOLDING CORPORATION 

 Segment Sales & Segment EBITDA (Unaudited) 

 For the Three Months Ended March 31, 2013 and 2012 

 (In millions) 

Three Months Ended

March 31, 

 Sales 

2013

2012

Light Vehicle Driveline

$        619

$        727

Power Technologies

256

268

Commercial Vehicle

458

551

Off-Highway

343

418

Total Sales

$     1,676

$     1,964

 Segment EBITDA 

Light Vehicle Driveline

$         41

$         63

Power Technologies

36

40

Commercial Vehicle

41

61

Off-Highway

41

49

 Total Segment EBITDA 

159

213

 Corporate expense and other items, net 

(1)

(3)

 Structures EBITDA 

2

 Adjusted EBITDA 

$        158

$        212

 

 DANA HOLDING CORPORATION 

 Reconciliation of Segment and Adjusted EBITDA 

 to Net Income (Unaudited) 

 For the Three Months Ended March 31, 2013 and 2012 

 (In millions) 

Three Months Ended

March 31, 

2013

2012

 Segment EBITDA 

$        159

$        213

Corporate expense and other items, net

(1)

(3)

Structures EBITDA

2

 Adjusted EBITDA 

158

212

Depreciation

(42)

(48)

Amortization of intangibles

(22)

(22)

Restructuring

(2)

(5)

Strategic transaction and other expenses

(2)

(3)

Impairment and loss on sale of assets

(3)

Structures EBITDA

(2)

Stock compensation expense

(5)

(7)

Interest expense

(21)

(21)

Interest income

7

6

 Income from continuing operations before 

income taxes

71

107

 Income tax expense 

27

37

 Equity in earnings of affiliates 

4

4

 Income from continuing operations 

48

74

 Income (loss) from discontinued operations 

2

(1)

 Net income 

$         50

$         73

 

 DANA HOLDING CORPORATION 

 Diluted Adjusted EPS (Unaudited) 

 For the Three Months Ended March 31, 2013 and 2012 

 (In millions except per share amounts) 

Three Months Ended

March 31, 

2013

2012

 Net income attributable to parent company 

$             42

$             70

 Restructuring charges (1) 

2

5

 Amortization of intangibles (1) 

17

16

 Non-recurring items (1) 

(2)

3

 Adjusted net income 

$             59

$             94

 Diluted shares - as reported 

214

215

 Adjusted diluted shares 

214

215

 Diluted adjusted EPS 

$          0.28

$          0.44

 (1) Amounts are net of associated tax effect. 

 

SOURCE Dana Holding Corporation



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