Dana Holding Corporation Reports First-Quarter 2008 Results

PRNewswire-FirstCall
TOLEDO, Ohio
(NYSE:DAN)
May 14, 2008

TOLEDO, Ohio, May 14 /PRNewswire-FirstCall/ -- Dana Holding Corporation (NYSE: DAN) has announced its first-quarter 2008 results. As a result of its January 31 emergence from Chapter 11 reorganization, Dana's first-quarter financial statements include two months presented under the provisions of "fresh start" accounting required for companies emerging from reorganization.

  (Logo:  http://www.newscom.com/cgi-bin/prnh/19990903/DANA )

  First-Quarter Profits Improved

Dana delivered improved profitability in the first quarter of 2008 versus the same period one year ago, highlighted by:

  -- Net sales of $2,312 million, an increase of approximately 8 percent
     compared to 2007, primarily because of currency effects.
  -- Net income of $685 million, including a one-time gain of $754 million
     after taxes, reflecting effects of emergence and adoption of fresh
     start accounting.  This compares to a net loss of $92 million in the
     first quarter of 2007.
  -- Earnings before interest, taxes, depreciation, amortization, and
     restructuring (EBITDA) of $148 million, compared with $90 million in
     2007.  This reflects improved pricing and lower costs.
  -- Strong liquidity of $1.6 billion at March 31, 2008.

"We are making progress in our turnaround effort despite a tough environment," said Executive Chairman John Devine. "As discussed earlier this year, we have much more to do and remain focused on our top priorities. With a new management team coming together, a strong balance sheet, and a clear sense of urgency, we are committed to repositioning Dana for a strong future."

Added Chief Executive Officer Gary Convis, "As we pursue improved financial performance, we are taking aggressive actions to enhance our operational excellence. Chief among these are the establishment of shared, targeted metrics across all of our businesses; the implementation of the Dana Operating System, a coordinated approach to drive continuous improvement throughout our operations; and the review of our global manufacturing footprint to ensure that we are producing the right products in the right places to best serve the needs of our customers."

Business Segment Highlights

First-quarter EBITDA for Dana's Automotive Systems Group (ASG) totaled $109 million, compared to $72 million in 2007. Sales increased $106 million compared to 2007. Each of the ASG businesses was adversely impacted by the effects of lower North American volume, including the effects of a labor disruption at a major automotive parts supplier. Offsetting the weakness in the North American markets were stronger production levels elsewhere in the world, currency, and benefits from customer pricing actions.

EBITDA for Dana's Heavy Vehicle Systems Group (HVSG) totaled $60 million for the first quarter of 2008, compared to $56 million last year. The group's Commercial Vehicle segment reported a sales decline of 10 percent, primarily because of lower North American production following the buying surge in advance of 2007 emission regulations. The Off-Highway Products segment reported a $95 million increase in sales compared to the first quarter of 2007. Off-Highway sales benefited from increased production, new programs, and currency.

Unprecedented Steel Costs Contribute to Challenging Environment

In addition to vehicle production declines in several North American sectors, Dana's results are being significantly impacted by steel costs. Dana purchases approximately 1.5 million tons of steel and products with significant steel content annually. Average prices for scrap and hot-rolled steel increased by approximately 30 percent during the first quarter of 2008, and prices have continued to climb. While the company has taken certain available measures to mitigate these costs, at average scrap steel prices of $525 per ton for 2008, Dana could experience an adverse impact of $70 million to $100 million on the annual cost of its steel and steel-based products.

Dana to Host First-Quarter Conference Call at 10 a.m. Today

Dana will discuss its first-quarter results in a conference call at 10 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 Web site. To dial into the conference call, domestic locations should call 1-888-311-4590 (Conference I.D. # 46202470). International locations should call 1-706-758-0054 (Conference I.D. # 46202470). Please ask for the Dana Holding Corporation Financial Webcast and Conference Call. Phone registration will be available beginning at 9:30 a.m. 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 the conference I.D. number 46202470. 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

In connection with Dana's emergence from bankruptcy on January 31, 2008 and the application of fresh start accounting in accordance with the provisions of the American Institute of Certified Public Accountants' Statement of Position 90-7, the post-emergence results of the successor company for the two months ended March 31, 2008 and the pre-emergence results of the predecessor company for the one month ended January 31, 2008 are presented separately as successor and predecessor results in the financial statements presented in accordance with generally accepted accounting principles (GAAP). This presentation is required by GAAP as the successor company is considered to be a new entity, and the results of the new entity reflect the application of fresh start accounting. For the readers' convenience and interest in this earnings release, we have combined the separate successor and predecessor periods to derive combined results for the three months ended March 31, 2008. The financial information accompanying this release provides the separate successor and predecessor GAAP results for the applicable periods, along with the combined results described above for the first quarter of 2008.

This release refers to EBITDA, which we've defined to be earnings before interest, taxes, depreciation, amortization and restructuring. EBITDA is a non-GAAP financial measure, and the measure currently being used by Dana as the primary measure of its reportable operating segment performance. EBITDA was selected as the primary measure for operating segment performance as well as a relevant measure of Dana's overall performance given the enhanced comparability and usefulness after application of fresh start accounting. The most significant impact to Dana's ongoing results of operations as a result of applying fresh start accounting is higher depreciation and amortization. By using EBITDA, which is a performance measure that excludes depreciation and amortization, the comparability of results is enhanced. Management also believes that EBITDA is an important measure since the financial covenants of our primary debt agreements are EBITDA-based, and our management incentive performance programs are based, in part, on EBITDA. Because it is a non-GAAP measure, EBITDA should not be considered a substitute for net income or other reported results prepared in accordance with GAAP. The financial information accompanying this release provides a reconciliation of EBITDA for the periods presented to the reported income (loss) from continuing operations before income taxes, which is a GAAP measure.

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 axles; driveshafts; and structural, sealing, and thermal-management products; as well as genuine service parts. The company's customer base includes virtually every major vehicle manufacturer in the global automotive, commercial vehicle, and off- highway markets, which collectively produce more than 70 million vehicles annually. Based in Toledo, Ohio, the company's operations employ approximately 35,000 people in 26 countries and reported 2007 sales of $8.7 billion. For more information, please visit: http://www.dana.com/.

                           DANA HOLDING CORPORATION
                     Consolidated Statement of Operations
                For the Quarters Ended March 31, 2008 and 2007
                                 (Unaudited)

                                        Three Months Ended
                                          March 31, 2008

                              Period from Prior Dana  Combined   Prior Dana
                               February 1  January 1  January 1 Three Months
                               through     through     through     Ended
                               March 31,  January 31, March 31,   March 31,
                                 2008        2008      2008 (1)     2007

  Net sales                     $1,561       $751      $2,312     $2,145
  Costs and expenses
    Cost of sales                1,477        702       2,179      2,043
    Selling, general and
     administrative expenses        65         34          99         96
    Amortization of intangibles     12                     12
    Realignment charges, net         5         12          17         19
    Other income, net               32          8          40         46
  Income from continuing
   operations before interest,
   reorganization items and
   income taxes                     34         11          45         33
  Interest expense (contractual
   interest of $17 for the one
   month ended January 31, 2008
   and $36 for the three months
   ended March 31, 2007)            27          8          35         23
  Reorganization items, net          9         98         107         37
  Fresh start accounting
   adjustments                              1,009       1,009
  Income (loss) from continuing
   operations before income taxes   (2)       914         912        (27)
  Income tax expense               (20)      (199)       (219)       (15)
  Minority interests                (2)        (2)         (4)        (2)
  Equity in earnings of affiliates   1          2           3          8
  Income (loss) from continuing
   operations                      (23)       715         692        (36)
  Loss from discontinued
   operations                       (1)        (6)         (7)       (56)
  Net income (loss)                (24)       709         685        (92)
  Preferred stock dividend
   requirements                      5                      5
  Net income (loss) available
   to common stockholders         $(29)      $709        $680       $(92)
  Net income (loss) from
   continuing operations:
    Basic                       $(0.28)     $4.77                 $(0.24)
    Diluted                     $(0.28)     $4.75                 $(0.24)
  Net loss from discontinued
   operations:
    Basic                       $(0.01)    $(0.04)                $(0.37)
    Diluted                     $(0.01)    $(0.04)                $(0.37)
  Net income (loss) available
   to common stockholders:
    Basic                       $(0.29)     $4.73                 $(0.61)
    Diluted                     $(0.29)     $4.71                 $(0.61)
  Average common shares
   outstanding - Basic             100        150                    150
  Average common shares
   outstanding - Diluted           160        150                    150

  (1) See pages two and three of the press release for comments regarding
      the presentation of combined information for the three months ended
      March 31, 2008.



                           DANA HOLDING CORPORATION
                          Consolidated Balance Sheet
                    At March 31, 2008 and December 31, 2007
                                 (Unaudited)

                                                       Dana      Prior Dana
                                                     March 31,  December 31,
  Assets                                               2008         2007
  Current assets
  Cash and cash equivalents                           $1,283        $1,271
  Restricted cash                                                       93
  Accounts receivable
    Trade, less allowance for doubtful accounts
     of $23 in 2008 and $20 in 2007                    1,444         1,197
  Other                                                  364           295
  Inventories
    Raw materials                                        383           331
    Work in process and finished goods                   634           481
  Assets of discontinued operations                                     24
  Other current assets                                   123           100
      Total current assets                             4,231         3,792
  Goodwill                                               310           349
  Intangibles                                            678             1
  Investments and other assets                           252           348
  Investments in affiliates                              183           172
  Property, plant and equipment, net                   2,049         1,763
      Total assets                                    $7,703        $6,425

  Liabilities and stockholders' equity (deficit)
  Current liabilities
  Notes payable, including current portion of
   long-term debt                                       $127          $283
  Debtor-in-possession financing                                       900
  Accounts payable                                     1,214         1,072
  Accrued payroll and employee benefits                  268           258
  Liabilities of discontinued operations                                 9
  Taxes on income                                        142            12
  Other accrued liabilities                              555           418
  Total current liabilities                            2,306         2,952

  Liabilities subject to compromise                                  3,511
  Deferred employee benefits and other non-current
   liabilities                                           907           630
  Long-term debt                                       1,321            19
  Minority interest in consolidated subsidiaries         115            95
  Commitments and contingencies (Note 16)
      Total liabilities                                4,649         7,207

  Preferred stock, 50,000,000 shares authorized
    Series A, $0.01 par value, 2,500,000 issued and
     outstanding                                         242
    Series B, $0.01 par value, 5,400,000 issued and
     outstanding                                         529
  Common stock, $.01 par value, 450,000,000
   authorized, 97,971,791 issued and outstanding           1
  Prior Dana common stock, $1.00 par value,
   350,000,000 authorized, 150,245,250 issued and
   outstanding                                                         150
  Additional paid-in-capital                           2,267           202
  Retained earnings (deficit)                            (29)         (468)
  Accumulated other comprehensive income (loss)           44          (666)
      Total stockholders' equity (deficit)             3,054          (782)
      Total liabilities and stockholders' equity
       (deficit)                                      $7,703        $6,425



                         DANA HOLDING CORPORATION
                   Consolidated Statement of Cash Flows
              For the Quarters ended March 31, 2008 and 2007
                               (Unaudited)

                                       Three Months Ended
                                         March 31, 2008

                             Period from  Prior Dana  Combined   Prior Dana
                              February 1   January 1  January 1 Three Months
                               through     through    through       Ended
                               March 31,  January 31, March 31,    March 31,
                                 2008        2008      2008 (1)      2007

  Cash flows - operating
   activities
  Net income (loss)              $(24)       $709       $685         $(92)
  Depreciation and amortization    67          23         90           70
  Amortization of inventory
   valuation                       15                     15
  Minority interest expense         2           2          4
  Deferred income taxes            (2)        191        189
  Reorganization:
    Gain on settlement
     of liabilities subject
     to compromise                            (27)       (27)
    Payment of claims             (88)                   (88)
    Reorganization items net of
     cash payments                (18)         79         61           27
    Fresh start adjustments                (1,009)    (1,009)
    Payments to VEBAs            (733)        (55)      (788)
  Loss on sales of businesses       1           7          8           14
  Change in Working capital      (124)        (61)      (185)         (52)
  Other, net                      (23)         19         (4)          16
   Net cash flows provided by
    (used in) operating
    activities                   (927)       (122)    (1,049)         (17)
  Cash flows - investing
   activities
  Purchases of property,
   plant and equipment            (29)        (16)       (45)         (39)
  Proceeds from sale of
   businesses and assets                        5          5          328
  Change in restricted cash                    93         93
  Other                             8          (5)         3          (15)
  Net cash flows provided by
   (used in) investing
   activities                     (21)         77         56          274
  Cash flows - financing
   activities
  Proceeds from (repayment of)
   debtor-in-possession facility             (900)      (900)         200
  Net change in short-term debt    (7)        (18)       (25)          65
  Payment of DCC Medium Term
   Notes                                     (136)      (136)
  Proceeds from Exit Facility
   debt                            80       1,350      1,430
  Original issue discount fees               (114)      (114)
  Deferred financing fees                     (40)       (40)
  Repayment of Exit Facility       (4)                    (4)
  Issuance of Series A and
   Series B preferred stock                   771        771
  Other                            (5)         (1)        (6)
  Net cash flows provided by
   (used in) financing activities  64         912        976          265
  Net increase (decrease) in
   cash and cash equivalents     (884)        867        (17)         522
  Cash and cash equivalents -
   beginning of period          2,147       1,271      1,271          719
  Effect of exchange rate
   changes on cash balances        20           5         25           17
  Net change in cash of
   discontinued operations                      4          4           (8)
  Cash and cash equivalents -
   end of period               $1,283      $2,147     $1,283       $1,250

  (1) See pages two and three of the press release for comments regarding
      the presentation of combined information for the three months ended
      March 31, 2008.



                           DANA HOLDING CORPORATION
                        SEGMENT EBITDA RECONCILIATION
      Reconciliation of Segment EBITDA to Income (Loss) from Continuing
                        Operations Before Income Taxes

                                       Three Months Ended
                                         March 31, 2008

                               Dana     Prior Dana   Combined   Prior Dana
                             Two Months One Month  Three Months Three Months
                               Ended      Ended       Ended        Ended
                             March 31,  January 31,  March 31,    March 31,
                                2008       2008      2008 (1)       2007

  ASG                            $77         $32         $109          $72
  HVSG                            41          19           60           56
  Segment EBITDA                 118          51          169          128

    Shared services and
     administrative              (30)        (10)         (40)         (40)
    Closed operations not in
     segments                      2          (2)                       (2)
    Foreign exchange not in
     segments                     15           4           19            4
  EBITDA                         105          43          148           90

    Depreciation                 (47)        (23)         (70)         (67)
    Amortization                 (30)                     (30)
    Realignment                   (5)        (12)         (17)         (19)
    DCC EBIT                                                             7
    Reorganization items, net     (9)        (98)        (107)         (37)
    Interest expense             (27)         (8)         (35)         (23)
    Interest income               11           4           15            8
    Fresh start accounting
     adjustments                           1,009        1,009
    Other income (loss)                       (1)          (1)          14
  Income (loss) from continuing
   operations before income
   taxes                         $(2)       $914         $912         $(27)

  (1) See pages two and three of the press release for comments regarding
      the presentation of non-GAAP measures and combined information for the
      three months ended March 31, 2008.
Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/19990903/DANA
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SOURCE: Dana Holding Corporation

CONTACT: Investors: Karen Crawford, +1-419-535-4635; Media: Chuck
Hartlage, +1-419-535-4728, both of Dana Holding Corporation

Web site: http://www.dana.com/

Company News On-Call: http://www.prnewswire.com/comp/226839.html


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