Dana Holding Corporation Reports Third-Quarter Profit of $46 Million; Achieves Positive Free Cash Flow for Sixth Consecutive Quarter, Raises Full-Year Guidance
MAUMEE, Ohio, Oct. 28 /PRNewswire-FirstCall/ -- Dana Holding Corporation (NYSE: DAN) today announced strong third-quarter 2010 results. Highlights for the quarter included:
- Delivering positive net income of $46 million
- Achieving adjusted EBITDA of $148 million on sales of $1.5 billion with adjusted EBITDA margin of 9.8 percent
- Raising full-year adjusted EBITDA outlook to a range of $530 million to $550 million
- Generating free cash flow of $59 million, marking sixth consecutive positive quarter
- Increasing net cash position to $184 million
The company reported quarterly net income of $46 million, a substantial increase over the net loss of $38 million reported during the same period last year. Third-quarter adjusted EBITDA was $148 million, a 47-percent improvement over the $101 million reported for the same period in 2009, and adjusted EBITDA margin for the quarter improved to 9.8 percent, compared with 7.6 percent one year ago. Sales for the period were $1,516 million, up from $1,329 million for the third quarter last year.
Dana achieved positive free cash flow for the sixth consecutive quarter, generating $59 million during the third quarter, compared to free cash flow of $145 million one year ago. Total cash at the end of the third quarter was $1,137 million, resulting in a net cash position of $184 million – an increase of $64 million from the end of the prior quarter and $240 million from the end of last year.
As a result of its solid third-quarter performance and based on its anticipated 2010 full-year sales of approximately $6 billion, the company has improved its full-year adjusted EBITDA outlook to a range of $530 million to $550 million. Dana has also indicated that it now expects to achieve positive free cash flow in a range of $275 million to $300 million in 2010.
"Dana had a strong third quarter with adjusted EBITDA of $148 million and a substantial improvement in profits," said Dana President and Chief Executive Officer Jim Sweetnam. "I am particularly pleased that we've begun to demonstrate consistent performance, as evidenced by several consecutive quarters of increasingly positive results. This is the result of sound execution by our global team.
"Each of our business segments – light vehicle driveline, power technologies, commercial vehicle, and off-highway – again generated increases in EBITDA during the third quarter," he added. "This speaks to the solid progress we continue to make in reinforcing our competitive position and in winning profitable net new business in growing markets."
Nine-Month Results
Adjusted EBITDA for the nine months ended September 30, 2010, was $410 million, a nearly $200 million increase from $211 million during the period last year. Sales for the first nine months of 2010 were $4,550 million, which compares with $3,735 million during the same period one year ago. Dana swung to net income of $24 million in the first nine months of 2010, compared to a net loss of $195 million during the same period in 2009.
Dana to Host Third-Quarter Conference Call at 11 a.m. Today
Dana will discuss its third-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 only available online via a link provided on the Dana Investor website. To dial into the conference call, domestic locations should call 1-888-311-4590 (Conference I.D. # 16259366). International locations should call 1-706-758-0054 (Conference I.D. # 16259366). Please ask for the Dana Holding Corporation Financial Webcast and Conference Call. Phone registration will be available beginning at 10:30 a.m. EDT. An audio recording of the call will be available after 5 p.m. To access this recording, please dial 1-800-642-1687 (U.S. or Canada) or 1-706-645-9291 (international) and enter Conference I.D. # 16259366. A webcast replay will also be available after 5 p.m. today, and may be accessed via the Dana Investor website.
Non-GAAP Measures
This release refers to adjusted EBITDA, which we've defined to be earnings before interest, taxes, depreciation, amortization, non-cash equity grant expense, restructuring expense, and other nonrecurring items (gain/loss on debt extinguishment or divestitures, impairment, etc). Adjusted EBITDA is a non-GAAP financial measure, and the measure currently being used by Dana as the primary measure of its operating segment performance. The most significant impact to 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, which is a performance measure that excludes depreciation and amortization, the comparability of results was enhanced. Management also believes that adjusted EBITDA is an important measure since the financial covenants of our primary debt agreements are adjusted EBITDA-based, and our management incentive performance programs are based, in part, on adjusted EBITDA. Because it is a non-GAAP measure, adjusted EBITDA should not be considered a substitute for net income (loss) or other reported results prepared in accordance with GAAP. The financial information accompanying this release provides a reconciliation of adjusted EBITDA for the periods presented to the reported income (loss) before income taxes, which is a GAAP measure.
Free cash flow is also a non-GAAP financial measure, which we have defined as Cash provided by operations (a GAAP measure) exclusive of any bankruptcy claim-related payments included therein, less capital spending. This measure is useful in evaluating the operational cash flow of the company inclusive of the spending required to maintain the operations.
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 and driveshafts), power technologies (sealing and thermal-management products), and genuine service parts for light and heavy manufacturers. The company's customer base includes virtually 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 2009 sales of $5.2 billion. For more information, please visit: www.dana.com.
DANA HOLDING CORPORATION |
||||
Consolidated Statement of Operations (Unaudited) |
||||
For the Three Months Ended September 30, 2010 and 2009 |
||||
Three Months Ended |
||||
(In millions except per share amounts) |
September 30, |
|||
2010 |
2009 |
|||
Net sales |
$ 1,516 |
$ 1,329 |
||
Costs and expenses |
||||
Cost of sales |
1,338 |
1,247 |
||
Selling, general and administrative expenses |
99 |
73 |
||
Amortization of intangibles |
15 |
18 |
||
Restructuring charges, net |
10 |
14 |
||
Other income, net |
10 |
10 |
||
Income (loss) before interest, reorganization |
||||
items and income taxes |
64 |
(13) |
||
Interest expense |
22 |
36 |
||
Income (loss) before income taxes |
42 |
(49) |
||
Income tax benefit |
4 |
9 |
||
Equity in earnings of affiliates |
1 |
2 |
||
Net income (loss) |
47 |
(38) |
||
Less: Noncontrolling interests net income |
1 |
|||
Net income (loss) attributable to the parent company |
46 |
(38) |
||
Preferred stock dividend requirements |
8 |
8 |
||
Net income (loss) available to common stockholders |
$ 38 |
$ (46) |
||
Net income (loss) per share available to |
||||
parent company stockholders: |
||||
Basic |
$ 0.27 |
$ (0.45) |
||
Diluted |
$ 0.22 |
$ (0.45) |
||
Average common shares outstanding |
||||
Basic |
141 |
101 |
||
Diluted |
212 |
101 |
||
DANA HOLDING CORPORATION |
||||
Consolidated Statement of Operations (Unaudited) |
||||
For the Nine Months Ended September 30, 2010 and 2009 |
||||
Nine Months Ended |
||||
(In millions except per share amounts) |
September 30, |
|||
2010 |
2009 |
|||
Net sales |
$ 4,550 |
$ 3,735 |
||
Costs and expenses |
||||
Cost of sales |
4,063 |
3,598 |
||
Selling, general and administrative expenses |
292 |
217 |
||
Amortization of intangibles |
46 |
53 |
||
Restructuring charges, net |
60 |
93 |
||
Impairment of long-lived assets |
6 |
|||
Other income, net |
9 |
100 |
||
Income (loss) before interest, reorganization |
||||
items and income taxes |
98 |
(132) |
||
Interest expense |
68 |
108 |
||
Reorganization items |
(2) |
|||
Income (loss) before income taxes |
30 |
(238) |
||
Income tax benefit (expense) |
(10) |
39 |
||
Equity in earnings of affiliates |
7 |
(2) |
||
Net income (loss) |
27 |
(201) |
||
Less: Noncontrolling interests net income (loss) |
3 |
(6) |
||
Net income (loss) attributable to the parent company |
24 |
(195) |
||
Preferred stock dividend requirements |
24 |
24 |
||
Net income (loss) available to common stockholders |
$ - |
$ (219) |
||
Net income (loss) per share available to |
||||
parent company stockholders: |
||||
Basic |
$ - |
$ (2.17) |
||
Diluted |
$ - |
$ (2.17) |
||
Average common shares outstanding |
||||
Basic |
140 |
100 |
||
Diluted |
140 |
100 |
||
DANA HOLDING CORPORATION |
||||||
Consolidated Balance Sheet (Unaudited) |
||||||
As of September 30, 2010 and December 31, 2009 |
||||||
(In millions except per share amounts) |
||||||
September 30, |
December 31, |
|||||
Assets |
2010 |
2009 |
||||
Current assets |
||||||
Cash and cash equivalents |
$ 1,137 |
$ 947 |
||||
Accounts receivable |
||||||
Trade, less allowance for doubtful accounts |
||||||
of $12 in 2010 and $18 in 2009 |
901 |
728 |
||||
Other |
172 |
141 |
||||
Inventories |
||||||
Raw materials |
322 |
300 |
||||
Work in process and finished goods |
367 |
308 |
||||
Other current assets |
91 |
59 |
||||
Current assets held for sale |
5 |
99 |
||||
Total current assets |
2,995 |
2,582 |
||||
Goodwill |
106 |
111 |
||||
Intangibles |
373 |
438 |
||||
Investments and other assets |
225 |
233 |
||||
Investments in affiliates |
117 |
112 |
||||
Property, plant and equipment, net |
1,351 |
1,484 |
||||
Noncurrent assets held for sale |
3 |
104 |
||||
Total assets |
$ 5,170 |
$ 5,064 |
||||
Liabilities and equity |
||||||
Current liabilities |
||||||
Notes payable, including current portion of long-term debt |
$ 50 |
$ 34 |
||||
Accounts payable |
807 |
601 |
||||
Accrued payroll and employee benefits |
149 |
103 |
||||
Accrued restructuring costs |
37 |
29 |
||||
Taxes on income |
19 |
40 |
||||
Other accrued liabilities |
277 |
270 |
||||
Current liabilities held for sale |
2 |
79 |
||||
Total current liabilities |
1,341 |
1,156 |
||||
Long-term debt |
903 |
969 |
||||
Deferred employee benefits and other noncurrent liabilities |
1,127 |
1,160 |
||||
Commitments and contingencies |
||||||
Total liabilities |
3,371 |
3,285 |
||||
Parent company stockholders' equity |
||||||
Preferred stock, 50,000,000 shares authorized |
||||||
Series A, $0.01 par value, 2,500,000 issued and outstanding |
242 |
242 |
||||
Series B, $0.01 par value, 5,400,000 issued and outstanding |
529 |
529 |
||||
Common stock, $0.01 par value, 450,000,000 shares authorized, |
||||||
141,143,311 outstanding |
1 |
1 |
||||
Additional paid-in capital |
2,592 |
2,580 |
||||
Accumulated deficit |
(1,169) |
(1,169) |
||||
Treasury stock, at cost |
(2) |
|||||
Accumulated other comprehensive loss |
(492) |
(504) |
||||
Total parent company stockholders' equity |
1,701 |
1,679 |
||||
Noncontrolling interests |
98 |
100 |
||||
Total equity |
1,799 |
1,779 |
||||
Total liabilities and equity |
$ 5,170 |
$ 5,064 |
||||
DANA HOLDING CORPORATION |
|||||
Consolidated Statement of Cash Flows (Unaudited) |
|||||
For the Three Months Ended September 30, 2010 and 2009 |
|||||
Three Months Ended |
|||||
(In millions) |
September 30, |
||||
2010 |
2009 |
||||
Cash flows − operating activities |
|||||
Net income (loss) |
$ 47 |
$ (38) |
|||
Depreciation |
57 |
79 |
|||
Amortization of intangibles |
19 |
22 |
|||
Amortization of deferred financing charges and original issue discount |
7 |
9 |
|||
Loss on extinguishment of debt |
3 |
5 |
|||
Deferred income taxes |
(4) |
(5) |
|||
Pension expense in excess of (less than) contributions |
4 |
||||
Change in working capital |
(43) |
84 |
|||
Other, net |
5 |
9 |
|||
Net cash flows provided by operating activities (1) |
95 |
165 |
|||
Cash flows − investing activities |
|||||
Purchases of property, plant and equipment (1) |
(36) |
(20) |
|||
Other |
(2) |
1 |
|||
Net cash flows used in investing activities |
(38) |
(19) |
|||
Cash flows − financing activities |
|||||
Net change in short-term debt |
(1) |
||||
Proceeds from long-term debt |
51 |
2 |
|||
Repayment of long-term debt |
(47) |
(115) |
|||
Proceeds from issuance of common stock |
229 |
||||
Underwriting fee payment |
(12) |
||||
Dividends paid to preferred stockholders |
(16) |
||||
Dividends paid to noncontrolling interests |
(4) |
(5) |
|||
Other |
1 |
1 |
|||
Net cash flows provided by (used in) financing activities |
(15) |
99 |
|||
Net increase in cash and cash equivalents |
42 |
245 |
|||
Cash and cash equivalents − beginning of period |
1,059 |
553 |
|||
Effect of exchange rate changes on cash balances |
36 |
16 |
|||
Cash and cash equivalents − end of period |
$ 1,137 |
$ 814 |
|||
(1) Free cash flow of $59 in 2010 and $145 in 2009 is the sum of net cash provided by |
|||||
operating activities reduced by the purchases of property, plant and equipment. |
|||||
DANA HOLDING CORPORATION |
|||||
Consolidated Statement of Cash Flows (Unaudited) |
|||||
For the Nine Months Ended September 30, 2010 and 2009 |
|||||
Nine Months Ended |
|||||
($ in millions) |
September 30, |
||||
2010 |
2009 |
||||
Cash flows − operating activities |
|||||
Net income (loss) |
$ 27 |
$ (201) |
|||
Depreciation |
180 |
231 |
|||
Amortization of intangibles |
57 |
64 |
|||
Amortization of deferred financing charges and original issue discount |
20 |
27 |
|||
Loss on sale of business |
5 |
||||
Loss (gain) on extinguishment of debt |
7 |
(35) |
|||
Reorganization-related tax claim payment (1) |
(75) |
||||
Deferred income taxes |
(10) |
(31) |
|||
Pension expense in excess of (less than) contributions |
13 |
(5) |
|||
Change in working capital |
(10) |
49 |
|||
Other, net |
3 |
(11) |
|||
Net cash flows provided by operating activities (1) |
217 |
88 |
|||
Cash flows − investing activities |
|||||
Purchases of property, plant and equipment (1) |
(62) |
(74) |
|||
Proceeds from sale of businesses |
113 |
||||
Other |
3 |
3 |
|||
Net cash flows provided by (used in) investing activities |
54 |
(71) |
|||
Cash flows − financing activities |
|||||
Net change in short-term debt |
13 |
(36) |
|||
Advance received on corporate facility sale |
11 |
||||
Proceeds from long-term debt |
52 |
5 |
|||
Repayment of long-term debt |
(135) |
(197) |
|||
Proceeds from issuance of common stock |
229 |
||||
Underwriting fee payment |
(12) |
||||
Dividends paid to preferred stockholders |
(32) |
||||
Dividends paid to noncontrolling interests |
(6) |
(5) |
|||
Other |
2 |
(2) |
|||
Net cash flows used in financing activities |
(106) |
(7) |
|||
Net increase in cash and cash equivalents |
165 |
10 |
|||
Cash and cash equivalents − beginning of period |
947 |
777 |
|||
Effect of exchange rate changes on cash balances |
25 |
27 |
|||
Cash and cash equivalents − end of period |
$ 1,137 |
$ 814 |
|||
(1) Free cash flow of $230 in 2010 and $14 in 2009 is the sum of net cash provided by |
|||||
operating activities (exclusive of reorganization-related claims payments) reduced by |
|||||
the purchases of property, plant and equipment. |
|||||
DANA HOLDING CORPORATION |
||||||
Segment Sales and Adjusted EBITDA (Unaudited) |
||||||
For the Three Months Ended September 30, 2010 and 2009 |
||||||
($ in millions) |
Three Months Ended |
|||||
September 30, |
||||||
SALES |
2010 |
2009 |
||||
Light Vehicle Driveline |
$ 634 |
$ 532 |
||||
Power Technologies |
235 |
186 |
||||
Commercial Vehicle |
362 |
270 |
||||
Off-Highway |
271 |
184 |
||||
Structures |
13 |
157 |
||||
Other |
1 |
|||||
Total Sales |
$ 1,516 |
$ 1,329 |
||||
Adjusted EBITDA |
||||||
Light Vehicle Driveline |
$ 67 |
$ 45 |
||||
Power Technologies |
33 |
14 |
||||
Commercial Vehicle |
37 |
27 |
||||
Off-Highway |
23 |
11 |
||||
Structures |
11 |
|||||
Segment EBITDA |
160 |
108 |
||||
Shared services and administrative |
(4) |
(5) |
||||
Other expense, net |
(6) |
(2) |
||||
Foreign exchange not in segments |
(2) |
|||||
Adjusted EBITDA |
$ 148 |
$ 101 |
||||
DANA HOLDING CORPORATION |
||||||
Segment Sales and Adjusted EBITDA (Unaudited) |
||||||
For the Nine Months Ended September 30, 2010 and 2009 |
||||||
($ in millions) |
Nine Months Ended |
|||||
September 30, |
||||||
SALES |
2010 |
2009 |
||||
Light Vehicle Driveline |
$ 1,861 |
$ 1,393 |
||||
Power Technologies |
697 |
503 |
||||
Commercial Vehicle |
999 |
796 |
||||
Off-Highway |
815 |
640 |
||||
Structures |
175 |
403 |
||||
Other |
3 |
|||||
Total Sales |
$ 4,550 |
$ 3,735 |
||||
Adjusted EBITDA |
||||||
Light Vehicle Driveline |
$ 177 |
$ 76 |
||||
Power Technologies |
95 |
14 |
||||
Commercial Vehicle |
96 |
56 |
||||
Off-Highway |
69 |
27 |
||||
Structures |
8 |
20 |
||||
Segment EBITDA |
445 |
193 |
||||
Shared services and administrative |
(13) |
(15) |
||||
Other income (expense), net |
(15) |
30 |
||||
Foreign exchange not in segments |
(7) |
3 |
||||
Adjusted EBITDA |
$ 410 |
$ 211 |
||||
DANA HOLDING CORPORATION |
||||||
Reconciliation of Segment and Adjusted EBITDA to |
||||||
Income (Loss) Before Income Taxes (Unaudited) |
||||||
For the Three Months Ended September 30, 2010 and 2009 |
||||||
($ in millions) |
Three Months Ended |
|||||
September 30, |
||||||
2010 |
2009 |
|||||
Segment EBITDA |
$ 160 |
$ 108 |
||||
Shared services and administrative |
(4) |
(5) |
||||
Other expense, net |
(6) |
(2) |
||||
Foreign exchange not in segments |
(2) |
|||||
Adjusted EBITDA |
148 |
101 |
||||
Depreciation |
(57) |
(79) |
||||
Amortization |
(19) |
(22) |
||||
Restructuring |
(10) |
(14) |
||||
Loss on extinguishment of debt |
(3) |
(5) |
||||
Strategic transaction expenses |
(2) |
|||||
Loss on sale of assets, net |
(1) |
(1) |
||||
Stock compensation expense |
(4) |
(3) |
||||
Foreign exchange on intercompany loans |
||||||
and market value adjustments on forwards |
2 |
6 |
||||
Interest expense |
(22) |
(36) |
||||
Interest income |
8 |
6 |
||||
Income (loss) before income taxes |
$ 42 |
$ (49) |
||||
DANA HOLDING CORPORATION |
||||
Reconciliation of Segment and Adjusted EBITDA to |
||||
Income (Loss) Before Income Taxes (Unaudited) |
||||
For the Nine Months Ended September 30, 2010 and 2009 |
||||
($ in millions) |
Nine Months Ended |
|||
September 30, |
||||
2010 |
2009 |
|||
Segment EBITDA |
$ 445 |
$ 193 |
||
Shared services and administrative |
(13) |
(15) |
||
Other income (expense), net |
(15) |
30 |
||
Foreign exchange not in segments |
(7) |
3 |
||
Adjusted EBITDA |
410 |
211 |
||
Depreciation |
(180) |
(231) |
||
Amortization |
(57) |
(64) |
||
Restructuring |
(60) |
(93) |
||
Impairment |
(6) |
|||
Reorganization items, net |
2 |
|||
Gain (loss) on extinguishment of debt |
(7) |
35 |
||
Strategic transaction expenses |
(4) |
|||
Loss on sale of assets, net |
(7) |
(2) |
||
Stock compensation expense |
(9) |
(7) |
||
Foreign exchange on intercompany loans, Venezuelan currency |
||||
devaluation and market value adjustments on forwards |
(13) |
11 |
||
Interest expense |
(68) |
(108) |
||
Interest income |
21 |
18 |
||
Income (loss) before income taxes |
$ 30 |
$ (238) |
||
SOURCE Dana Holding Corporation
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