Dana Holding Corporation Reports Strong Second-Quarter Results
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MAUMEE, Ohio, July 29, 2010: Delivered positive net income of $9 million
-- Achieved adjusted EBITDA of $154 million on revenues of $1.5 billion
with adjusted EBITDA margin of 10.1 percent
-- Attained significant margin improvement with substantial increases in
all business segments
-- Generated free cash flow of $137 million, marking fifth consecutive
positive quarter
-- Increased net cash position to $120 million
-- Raised positive free cash flow guidance to more than $100 million in
2010
Dana Holding Corporation today announced its second-quarter 2010 results.
The company reported quarterly net income of $9 million, compared to break-even net income one year ago. Second-quarter adjusted EBITDA was $154 million, a substantial improvement over the $94 million reported for the same period in 2009, and adjusted EBITDA margin for the quarter improved to 10.1 percent, compared with 7.9 percent one year ago. Sales for the period were $1,526 million, up from $1,190 million for the second quarter last year.
Dana generated free cash flow of $137 million during the second quarter, which compares to $73 million one year ago. This marked the fifth consecutive quarter in which the company achieved positive free cash flow. The company increased its related guidance, indicating that it expects to achieve positive free cash flow of more than $100 million in 2010.
During the second quarter, total cash improved by $33 million from the prior quarter to $1,059 million. Since the end of 2009, total debt has been reduced by $64 million to $939 million at June 30, 2010. The company's net cash position of $120 million at the end of the quarter is an improvement of $176 million from December 31, 2009. Total liquidity improved by $215 million from the end of 2009 to $1,343 million at June 30.
"I am particularly pleased with our progress during the past quarter, as evidenced by the swing to positive net income and achieving positive free cash flow for a fifth consecutive quarter," said Dana President and Chief Executive Officer Jim Sweetnam. "Combined with substantial operating profit improvements and the effects of our continued restructuring efforts, the increase in revenues this quarter enabled us to make further progress in reinforcing our strong cash position.
"Overall, our second-quarter results underscore the consistent improvements that are positioning Dana for profitable growth moving forward," he added.
Six-Month Results
Adjusted EBITDA for the six months ended June 30, 2010, was $262
million, up significantly from $110 million during the period last year.
Sales for the first half of 2010 were $3,034 million, which compares with
$2,406 million during the same period one year ago. Dana narrowed its
first-half 2010 net loss to $22 million, compared with a net loss of $157
million in 2009.
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.
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 22,000 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 June 30,
2010 and 2009
-----------------------------------
Three Months
Ended
(In millions except per share amount) June 30,
--------
2010 2009
---- ----
Net sales $1,526 $1,190
Costs and expenses
Cost of sales 1,357 1,123
Selling, general and administrative
expenses 91 64
Amortization of intangibles 16 18
Restructuring charges, net 31 29
Impairment of long-lived assets 6
Other income, net 12 61
--- ---
Income before interest, reorganization
items and income taxes 43 11
Interest expense 20 37
Reorganization items (3)
---
Income (loss) before income taxes 23 (23)
Income tax benefit (expense) (17) 21
Equity in earnings of affiliates 4 (1)
--- ---
Net income (loss) 10 (3)
Less: Noncontrolling interests net
income (loss) 1 (3)
--- ---
Net income attributable to the parent
company 9 -
Preferred stock dividend requirements 8 8
--- ---
Net income (loss) available to common
stockholders $1 $(8)
=== ===
Net income (loss) per share available
to
parent company stockholders:
Basic $- $(0.08)
Diluted $- $(0.08)
Average common shares outstanding
Basic 140 100
Diluted 146 100
DANA HOLDING CORPORATION
Consolidated Statement of
Operations (Unaudited)
For the Six Months Ended June 30,
2010 and 2009
---------------------------------
Six Months
Ended
(In millions except per share
amount) June 30,
--------
2010 2009
---- ----
Net sales $3,034 $2,406
Costs and expenses
Cost of sales 2,725 2,351
Selling, general and
administrative expenses 193 144
Amortization of intangibles 31 35
Restructuring charges, net 50 79
Impairment of long-lived assets 6
Other income (expense), net (1) 90
--- ---
Income (loss) before interest,
reorganization
items and income taxes 34 (119)
Interest expense 46 72
Reorganization items (2)
---
Loss before income taxes (12) (189)
Income tax benefit (expense) (14) 30
Equity in earnings of affiliates 6 (4)
--- ---
Net loss (20) (163)
Less: Noncontrolling interests net
income (loss) 2 (6)
--- ---
Net loss attributable to the
parent company (22) (157)
Preferred stock dividend
requirements 16 16
--- ---
Net loss available to common
stockholders $(38) $(173)
==== =====
Net loss per share available to
parent company stockholders:
Basic $(0.28) $(1.72)
Diluted $(0.28) $(1.72)
Average common shares outstanding
Basic 140 100
Diluted 140 100
DANA HOLDING CORPORATION
Consolidated Balance Sheet (Unaudited)
As of June 30, 2010 and December 31, 2009
-----------------------------------------
(In millions except share and per share amounts)
June December
30, 31,
Assets 2010 2009
---- ----
Current assets
Cash and cash equivalents $1,059 $947
Accounts receivable
Trade, less allowance for doubtful accounts
of $11 in 2010 and $18 in 2009 860 728
Other 186 141
Inventories
Raw materials 284 300
Work in process and finished goods 331 308
Other current assets 94 59
Current assets held for sale 7 99
--- ---
Total current assets 2,821 2,582
Goodwill 95 111
Intangibles 378 438
Investments and other assets 229 233
Investments in affiliates 114 112
Property, plant and equipment, net 1,315 1,484
Noncurrent assets held for sale 2 104
--- ---
Total assets $4,954 $5,064
====== ======
Liabilities and equity
Current liabilities
Notes payable, including current portion of
long-term debt $48 $34
Accounts payable 767 601
Accrued payroll and employee benefits 120 103
Accrued restructuring costs 39 29
Taxes on income 29 40
Other accrued liabilities 288 270
Current liabilities held for sale 3 79
--- ---
Total current liabilities 1,294 1,156
Long-term debt 891 969
Deferred employee benefits and other noncurrent
liabilities 1,100 1,160
Commitments and contingencies
Total liabilities 3,285 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, $.01 par value, 450,000,000 shares
authorized,
140,441,226 issued and outstanding 1 1
Additional paid-in capital 2,588 2,580
Accumulated deficit (1,207) (1,169)
Treasury stock, at cost (1)
Accumulated other comprehensive loss (581) (504)
---- ----
Total parent company stockholders' equity 1,571 1,679
Noncontrolling interests 98 100
--- ---
Total equity 1,669 1,779
----- -----
Total liabilities and equity $4,954 $5,064
====== ======
DANA HOLDING CORPORATION
Consolidated Statement of Cash Flows
(Unaudited)
For the Three Months Ended June 30, 2010 and
2009
--------------------------------------------
Three Months
Ended
(In millions) June 30,
--------
2010 2009
---- ----
Cash flows - operating activities
Net income (loss) $10 $(3)
Depreciation 61 79
Amortization of intangibles 19 21
Amortization of deferred financing charges
and original issue discount 5 11
Reorganization-related tax claim payment (1) (75)
Gain on extinguishment of debt (40)
Deferred income taxes 5 (13)
Pension expense in excess of (less than)
contributions 4 (4)
Change in working capital 54 77
Other, net (6) (31)
--- ---
Net cash flows provided by operating
activities (1) 77 97
Cash flows - investing activities
Purchases of property, plant and equipment
(1) (15) (24)
Other 4 2
--- ---
Net cash flows used in investing activities (11) (22)
Cash flows - financing activities
Net change in short-term debt 4 (11)
Proceeds from long-term debt 3
Repayment of long-term debt (10) (79)
Dividends paid to preferred stockholders (16)
Dividends paid to noncontrolling interests (4)
Other 5 (5)
Net cash flows used in financing activities (21) (92)
--- ---
Net increase (decrease) in cash and cash
equivalents 45 (17)
Cash and cash equivalents - beginning of
period 1,026 549
Effect of exchange rate changes on cash
balances (12) 21
Cash and cash equivalents - end of period $1,059 $553
====== ====
(1) Free cash flow of $137 in 2010 and $73 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
Consolidated Statement of Cash Flows (Unaudited)
For the Six Months Ended June 30, 2010 and 2009
-----------------------------------------------
Six Months
Ended
(In millions) June 30,
--------
2010 2009
---- ----
Cash flows - operating activities
Net loss $(20) $(163)
Depreciation 123 152
Amortization of intangibles 38 42
Amortization of deferred financing charges and
original issue discount 13 18
Reorganization-related tax claim payment (1) (75)
Loss on sale of business 5
Loss (gain) on extinguishment of debt 4 (40)
Deferred income taxes (6) (26)
Pension expense in excess of (less than)
contributions 9 (5)
Change in working capital 33 (35)
Other, net (2) (20)
Net cash flows provided by (used in) operating
activities (1) 122 (77)
Cash flows - investing activities
Purchases of property, plant and equipment (1) (26) (54)
Proceeds from sale of businesses 113
Other 5 2
Net cash flows provided by (used in) investing
activities 92 (52)
Cash flows - financing activities
Net change in short-term debt 13 (35)
Advance received on corporate facility sale 11
Proceeds from long-term debt 1 3
Repayment of long-term debt (88) (82)
Dividends paid to preferred stockholders (16)
Dividends paid to noncontrolling interests (5)
Other 4 (3)
Net cash flows used in financing activities (91) (106)
--- ----
Net increase (decrease) in cash and cash
equivalents 123 (235)
Cash and cash equivalents - beginning of period 947 777
Effect of exchange rate changes on cash balances (11) 11
Cash and cash equivalents - end of period $1,059 $553
====== ====
(1) Free cash flow of $171 in 2010 and ($131) in 2009 is the sum of
net cash provided by (used in)
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 June
30, 2010 and 2009
-------------------------------
Three Months
(In millions) Ended
June 30,
--------
SALES 2010 2009
---- ----
Light Vehicle Driveline $650 $444
Power Technologies 234 161
Commercial Vehicle 335 262
Off-Highway 287 194
Structures 18 129
Other 2
Total Sales $1,526 $1,190
====== ======
Adjusted EBITDA
Light Vehicle Driveline $66 $39
Power Technologies 35 1
Commercial Vehicle 37 23
Off-Highway 25 5
Structures (3)
Segment EBITDA 160 68
Shared services and
administrative (4) (5)
Other income (expense), net (3) 33
Foreign exchange not in
segments 1 (2)
Adjusted EBITDA $154 $94
==== ===
DANA HOLDING CORPORATION
Segment Sales and Adjusted EBITDA
(Unaudited)
For the Six Months Ended June 30,
2010 and 2009
---------------------------------
Six Months
(In millions) Ended
June 30,
--------
SALES 2010 2009
---- ----
Light Vehicle Driveline $1,227 $861
Power Technologies 462 317
Commercial Vehicle 637 526
Off-Highway 544 456
Structures 162 246
Other 2
Total Sales $3,034 $2,406
====== ======
Adjusted EBITDA
Light Vehicle Driveline $110 $31
Power Technologies 62
Commercial Vehicle 59 29
Off-Highway 46 16
Structures 8 9
Segment EBITDA 285 85
Shared services and
administrative (9) (10)
Other income (expense), net (9) 32
Foreign exchange not in
segments (5) 3
Adjusted EBITDA $262 $110
==== ====
DANA HOLDING CORPORATION
Reconciliation of Segment and Adjusted
EBITDA to
Income (Loss) Before Income Taxes
(Unaudited)
For the Three Months Ended June 30, 2010
and 2009
----------------------------------------
Three Months
Ended
(In millions) June 30,
--------
2010 2009
---- ----
Segment EBITDA $160 $68
Shared services and administrative (4) (5)
Other income (expense), net (3) 33
Foreign exchange not in segments 1 (2)
Adjusted EBITDA 154 94
Depreciation (61) (79)
Amortization (19) (21)
Restructuring (31) (29)
Impairment (6)
Reorganization items, net 3
Gain on extinguishment of debt 40
Strategic transaction expenses (2)
Loss on sale of assets, net (1)
Stock compensation expense (3) (2)
Foreign exchange on intercompany loans,
Venezuelan currency
devaluation and market value adjustments
on forwards (3) 10
Interest expense (20) (37)
Interest income 7 6
Income (loss) before income taxes $23 $(23)
=== ====
DANA HOLDING CORPORATION
Reconciliation of Segment and Adjusted
EBITDA to
Loss Before Income Taxes (Unaudited)
For the Six Months Ended June 30, 2010
and 2009
--------------------------------------
Six Months
Ended
(In millions) June 30,
--------
2010 2009
---- ----
Segment EBITDA $285 $85
Shared services and administrative (9) (10)
Other income (expense), net (9) 32
Foreign exchange not in segments (5) 3
Adjusted EBITDA 262 110
Depreciation (123) (152)
Amortization (38) (42)
Restructuring (50) (79)
Impairment (6)
Reorganization items, net 2
Gain (loss) on extinguishment of debt (4) 40
Strategic transaction expenses (2)
Loss on sale of businesses and assets,
net (6) (1)
Stock compensation expense (5) (4)
Foreign exchange on intercompany
loans, Venezuelan currency
devaluation and market value
adjustments on forwards (15) 5
Interest expense (46) (72)
Interest income 13 12
Loss before income taxes $(12) $(189)
==== =====