Dana Holding Corporation Reports 2008 Results
PRNewswire
TOLEDO, Ohio
(NYSE:DAN)
Mar 16, 2009
TOLEDO, Ohio, March 16 /PRNewswire-FirstCall/ -- Dana Holding Corporation today announced its full-year and fourth-quarter 2008 results.
(Logo: http://www.newscom.com/cgi-bin/prnh/19990903/DANA )
Sales for the full-year 2008 were $8,095 million, down $626 million from $8,721 million in 2007. This decrease was driven primarily by sharply declining vehicle production levels in North America.
Including a one-time gain of $754 million related to emergence from Chapter 11 reorganization, net income was $18 million, compared with a net loss of $551 million for 2007. Earnings before interest, taxes, depreciation, amortization, and restructuring (EBITDA) for the full year were $301 million, compared with $450 million in 2007. The decline was due to significantly lower vehicle production, which was partially offset by margin improvements and cost reductions.
At year end, Dana had cash balances of $777 million and total liquidity of $866 million. Net debt was $474 million.
"We continue to respond to difficult market conditions through aggressive cost-reduction and efficiency actions, comprehensive operational restructuring, and being responsive to our customers," said Chairman and CEO John Devine. "These are unprecedented times that make any projections uncertain. We belive we are taking the difficult actions necessary to survive in the current environment and compete over the long term. There can be no assurances, however, if the global economy deteriorates substantially beyond our planning assumptions."
Three-Month Results
Sales for the fourth quarter of 2008 were $1,521 million, down $636 million, or 29 percent, from the prior year. Sales were impacted by both sharply declining North American vehicle production and unfavorable currency changes.
Fourth-quarter EBITDA was a negative $3 million, compared to $112 million for the same period in 2007. The impact of lower vehicle production drove the reduction in earnings. This decline was partially offset by higher pricing and cost savings from operational improvements.
Free cash flow was a negative $50 million for the fourth quarter, compared to $83 million for the prior-year period, primarily due to lower earnings for the quarter. Working capital was a source of $177 million of cash during the quarter, primarily due to lower production volumes. The cash balance at year end also reflects the repayment of $150 million of outstanding principal under the term loan facility to support an amendment to the company's credit agreement.
Devine added, "We expect 2009 to be even more challenging than 2008, but we believe Dana is prepared with plans to continue re-sizing our operations, improve operational performance and margins, and maintain adequate liquidity and earnings."
Dana to Host Fourth-Quarter Conference Call at 10:30 a.m. Today
Dana will discuss its full-year and fourth-quarter results in a conference call at 10:30 a.m. EDT today. Participants may listen via audio streaming online or telephone. Slide viewing and audio streaming are available via a link provided on the Dana Investor Web site - accessed through www.dana.com. Domestically, the call can be by joined by dialing 1-888-311-4590 (Conference I.D. 83216554); internationally, dial 1-706-758-0054 (Conference I.D. 83216554). Please ask for the Dana Quarterly Webcast and Conference Call. Phone registration will begin at 10 a.m. A recording of the call and a webcast replay will be available after 5 p.m. today 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 11 months ended December 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 12 months ended December 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 twelve months 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. Based in Toledo, Ohio, the company employs approximately 29,000 people in 26 countries and reported 2008 sales of $8.1 billion. For more information, please visit: www.dana.com.
DANA HOLDING CORPORATION Consolidated Statement of Operations (Unaudited) For the Three Months Ended December 31, 2008 and 2007 Three Months Ended December 31, ------------ Dana Prior Dana 2008 2007 ---- ---- Net sales $1,521 $2,157 Costs and expenses Cost of sales 1,548 2,030 Selling, general and administrative expenses 67 102 Amortization of intangibles 17 Realignment charges, net 53 46 Impairment of goodwill (11) 89 Impairment of assets 4 Other income, net (1) 54 -- -- Income (loss) from continuing operations before interest, reorganization items and income taxes (158) (56) Interest expense (contractual interest of $54 for the three months ended December 31, 2007) 43 27 Reorganization items, net 3 102 -- --- Loss from continuing operations before income taxes (204) (185) Income tax benefit (expense) (51) (47) Equity in earnings of affiliates (1) 4 -- -- Loss from continuing operations (256) (228) Loss from discontinued operations (29) ---- --- Net loss (256) (257) Preferred stock dividend requirements 8 --- ----- Net loss available to common stockholders $(264) $(257) ===== ===== Net loss from continuing operations: Basic $(2.64) $(1.52) Diluted $(2.64) $(1.52) Net loss from discontinued operations Basic $- $(0.19) Diluted $- $(0.19) Net loss available to common stockholders Basic $(2.64) $(1.71) Diluted $(2.64) $(1.71) Average common shares outstanding: Basic 100 150 Diluted 100 150 DANA HOLDING CORPORATION Consolidated Statement of Operations For the Years Ended December 31, 2008 and 2007 Dana Prior Dana Combined Prior Dana ---- ---------- -------- ---------- Eleven Months One Month Year Year Ended Ended Ended Ended Dec. 31, Jan. 31, Dec. 31, Dec. 31, 2008 2008 2008 (1) 2007 ---- ---- -------- ---- Net sales $7,344 $751 $8,095 $8,721 Costs and expenses Cost of sales 7,127 702 7,829 8,231 Selling, general and administrative expenses 303 34 337 365 Amortization of intangibles 66 66 Realignment charges, net 114 12 126 205 Impairment of goodwill 169 169 89 Impairment of assets 14 14 Other income, net 53 8 61 162 -- -- -- --- Income (loss) from continuing operations before interest, reorganization items and income taxes (396) 11 (385) (7) Interest expense (contractual interest of $17 for the one month ended January 31, 2008 and $213 for the twelve months ended December 31, 2007) 142 8 150 105 Reorganization items, net 25 98 123 275 Fresh start accounting adjustments 1,009 1,009 ----- ----- Income (loss) from continuing operations before income taxes (563) 914 351 (387) Income tax expense (107) (199) (306) (62) Minority interests (6) (2) (8) (10) Equity in earnings of affiliates (11) 2 (9) 26 --- -- -- -- Income (loss) from continuing operations (687) 715 28 (433) Loss from discontinued operations (4) (6) (10) (118) -- -- --- ---- Net income (loss) (691) 709 18 (551) Preferred stock Dividend requirements 29 29 -- -- Net income (loss) available to common stockholders $(720) $709 $(11) $(551) ===== ==== ==== ===== Net income (loss) from continuing operations: Basic $(7.16) $4.77 $(2.89) Diluted $(7.16) $4.75 $(2.89) Net loss from Discontinued operations Basic $(0.04) $(0.04) $(0.79) Diluted $(0.04) $(0.04) $(0.79) Net income (loss) available to common stockholders: Basic $(7.20) $4.73 $(3.68) Diluted $(7.20) $4.71 $(3.68) Average common shares outstanding: Basic 100 150 150 Diluted 100 150 150 (1) See "Non-GAAP Measures" in body of press release for comments regarding the presentation of combined information for the year ended December 31, 2008 DANA HOLDING CORPORATION Consolidated Balance Sheet (Unaudited) At December 31, 2008 and 2007 Dana Prior Dana ---- ---------- December 31, December 31, Assets 2008 2007 ---- ---- Current assets Cash and cash equivalents $777 $1,271 Restricted cash 93 Accounts receivable Trade, less allowance for doubtful accounts of $23 in 2008 and $20 in 2007 827 1,197 Other 170 295 Inventories 901 812 Assets of discontinued operations 24 Other current assets 58 100 -- --- Total current assets 2,733 3,792 Goodwill 108 349 Intangibles 569 1 Investments and other assets 207 348 Investments in affiliates 135 172 Property, plant and equipment, net 1,841 1,763 ----- ----- Total assets $5,593 $6,425 ====== ====== Liabilities and stockholders' equity (deficit) Current liabilities Notes payable, including current portion of long-term debt $70 $283 Debtor-in-possession financing 900 Accounts payable 824 1,072 Accrued payroll and employee benefits 185 258 Liabilities of discontinued operations 9 Taxes on income 93 12 Other accrued liabilities 274 386 --- --- Total current liabilities 1,446 2,920 Liabilities subject to compromise 3,511 Deferred employee benefits and other Non-current liabilities 845 662 Long-term debt 1,181 19 Minority interest in consolidated subsidiaries 107 95 Commitments and contingencies ----- ----- Total liabilities 3,579 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, 100,099,188 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 2,321 202 Accumulated deficit (720) (468) Accumulated other comprehensive loss (359) (666) ---- ---- Total stockholders' equity (deficit) 2,014 (782) ----- ---- Total liabilities and stockholders' equity $5,593 $6,425 ====== ====== DANA HOLDING CORPORATION Consolidated Statement of Cash Flows (Unaudited) For the Three Months Ended December 31, 2008 and 2007 Three Months Ended ------------------- Dana Prior Dana December 31, December 31, 2008 2007 ---- ---- Cash flows - operating activities Net loss $(256) $(257) Depreciation 74 70 Amortization of intangibles 21 Amortization of deferred financing charges and original issue discount 7 Loss on repayment of debt 13 Impairment of goodwill, intangibles, investments and other assets (7) 128 Minority interest 10 Unremitted earnings of affiliates 1 (4) Deferred income taxes 36 40 Reorganization items net of cash payments 95 Pension - contributions paid in excess of expense (5) OPEB - cash paid in excess of expense (2) Loss on sale of businesses and assets 5 Change in accounts receivable 409 225 Change in inventories 77 45 Change in accounts payable (216) (75) Change in accrued payroll and employee benefits (28) 12 Change in accrued income taxes (24) (86) Change in other current assets and liabilities, net (41) 85 Change in other non-current assets and liabilities, net (28) (19) --- --- Net cash flows used in operating activities (1) 36 189 -- --- Cash flows - investing activities Purchases of property, plant and equipment (1) (86) (106) Proceeds from sale of businesses and assets 14 98 Change in restricted cash (81) Other (1) 10 -- -- Net cash flows provided by (used in) investing activities (73) (79) --- --- Cash flows - financing activities Net change in short-term debt 4 79 Payment of DCC Medium Term Notes (3) Deferred financing fees (24) Repayment of Exit Facility debt (153) Other (4) -- -- Net cash flows provided by (used in) financing activities (177) 76 ---- -- Net increase (decrease) in cash and cash equivalents (214) 186 Cash and cash equivalents - beginning of period 1,007 1,035 Effect of exchange rate changes on cash balances (16) 43 Net change in cash of discontinued operations 7 ---- - Cash and cash equivalents - end of period $777 $1,271 ==== ====== (1) Free cash flow of ($50) in 2008 and $83 in 2007 is the sum of net cash provided by (used in) operating activities (excluding claims payments) reduced by the purchases of property, plant and equipment. DANA HOLDING CORPORATION Consolidated Statement of Cash Flows For the Twelve Months Ended December 30, 2008 and 2007 Twelve Months Ended December 31, 2008 -------------------------- Dana Prior Dana Combined Prior Dana Eleven One Twelve Twelve Months Month Months Months Ended Ended Ended Ended Dec. 31, Jan. 31, Dec. 31, Dec. 31, 2008 2008 2008 (1) 2007 ---- ---- -------- ---- Cash flows - operating activities Net income (loss) $(691) $709 $18 $(551) Depreciation 269 23 292 279 Amortization of intangibles 81 81 Amortization of inventory valuation 15 15 Amortization of deferred financing charges and original issue discount 24 24 Loss on repayment of debt 13 13 Impairment of goodwill, intangibles, investments and other assets 183 183 131 Non-cash portion of U.K. pension charge 60 Minority interest 6 2 8 10 Unremitted earnings of affiliates 21 (4) 17 (26) Deferred income taxes 22 191 213 (29) Reorganization: Gain on settlement of liabilities subject to compromise (27) (27) Payment of claims (2) (100) (100) Reorganization items net of cash payments (24) 79 55 154 Fresh start adjustments (1,009) (1,009) Payments to VEBAs (2) (733) (55) (788) (27) Pension - contributions paid in excess of expense (36) (2) (38) OPEB - cash paid in excess of expense (2) (2) (71) Loss on sale of businesses and assets 6 7 13 Change in accounts receivable 512 (78) 434 (23) Change in inventories 42 (28) 14 (5) Change in accounts payable (227) 17 (210) 110 Change in accrued payroll and employee benefits (79) 12 (67) 10 Change in accrued income taxes (40) (2) (42) (6) Change in other current assets and liabilities, net (142) 18 (124) (3) Change in other non-current assets and liabilities, net (19) 27 8 (65) --- -- - --- Net cash flows used in operating activities (2) (897) (122) (1,019) (52) ---- ---- ------ --- Cash flows - investing activities Purchases of property, plant and equipment (2) (234) (16) (250) (254) Proceeds from sale of businesses and assets 14 5 19 609 Change in restricted cash 93 93 (78) Other (1) (5) (6) 71 -- -- -- -- Net cash flows provided by (used in) investing activities (221) 77 (144) 348 ---- -- ---- --- Cash flows - financing activities Proceeds from (repayment of) debtor-in-possession facility (900) (900) 200 Net change in short-term debt (70) (18) (88) 98 Payment of DCC Medium Term Notes (136) (136) (132) Proceeds from Exit Facility debt 80 1,350 1,430 Original issue discount fees (114) (114) Deferred financing fees (26) (40) (66) Repayment of Exit Facility debt (164) (164) Issuance of Series A and Series B preferred stock 771 771 Preferred dividends paid (18) (18) Other (9) (1) (10) -- -- --- --- Net cash flows provided by (used in) financing activities (207) 912 705 166 ---- --- --- --- Net increase (decrease) in cash and cash equivalents (1,325) 867 (458) 462 Cash and cash equivalents - beginning of period 2,147 1,271 1,271 704 Effect of exchange rate changes on cash balances (45) 5 (40) 104 Net change in cash of discontinued operations 4 4 1 ---- - - - Cash and cash equivalents - end of period $777 $2,147 $777 $1,271 ==== ====== ==== ====== (1) See "Non-GAAP Measures" in body of press release for comments regarding the presentation of combined information for the twelve months ended December 31, 2008. (2) Free cash flow of ($381) in 2008 and ($279) in 2007 is the sum of net cash provided by (used in) operating activities (excluding claims payments) reduced by the purchases of property, plant and equipment. DANA HOLDING CORPORATION SEGMENT SALES AND EBITDA (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, ------------ ------------ Dana Prior Dana Combined Prior Dana SALES 2008 2007 2008 (1) 2007 ---- ---- -------- ---- Light Axle $386 $644 $2,154 $2,627 Driveshaft 205 316 1,179 1,200 Sealing 134 183 705 728 Thermal 42 72 259 293 Structures 159 263 876 1,069 Commercial Vehicle 249 285 1,187 1,235 Off-Highway 347 391 1,727 1,549 Other (1) 3 8 20 -- - - -- Total Sales $1,521 $2,157 $8,095 $8,721 ====== ====== ====== ====== EBITDA Light Axle $(2) $30 $71 $106 Driveshaft (5) 28 108 104 Sealing (3) 19 61 73 Thermal (2) 3 8 21 Structures (5) 21 52 101 Commercial Vehicle 16 33 135 156 Off-Highway (4) (4) (18) (27) Eliminations and other 5 15 33 62 - -- -- -- Segment EBITDA 145 450 596 Shared services and administrative (28) (25) (146) (143) Other expense, net 25 (4) 3 Foreign exchange not in segments (4) (3) (6) --- -- -- -- EBITDA $(3) $112 $301 $450 === ==== ==== ==== (1) See "Non-GAAP Measures" in body of press release for comments regarding the presentation of combined information for the year ended December 31, 2008 DANA HOLDING CORPORATION SEGMENT EBITDA AND FREE CASH FLOW RECONCILIATION (Unaudited) Reconciliation of Segment EBITDA to Income (Loss) from Continuing Operations Before Income Taxes Three Months Ended December 31, ------------ Dana Prior Dana 2008 2007 ---- ---- EBITDA (3) 112 Depreciation (75) (70) Amortization (21) Realignment (53) (46) DCC EBIT 24 Goodwill impairment 11 (89) Impairment of investments and other assets (4) Reorganization items, net (3) (102) Loss on repayment of debt (10) Strategic transaction expenses (3) Loss on sale of assets, net (3) Stock compensation expense (2) Foreign exchange on intercompany loans and market value adjustments on hedges (7) Interest expense (43) (27) Interest income 12 13 -- -- Loss from continuing operations before income taxes $(204) $(185) ===== ===== Operating cash flow $36 $189 Purchases of property, plant and equipment (86) (106) --- ---- Free cash flow $(50) $83 ==== === DANA HOLDING CORPORATION SEGMENT EBITDA AND FREE CASH FLOW RECONCILIATION Reconciliation of Segment EBITDA to Income (Loss) from Continuing Operations Before Income Taxes Twelve Months Ended December 31, 2008 -------------------------- Dana Prior Dana Combined Prior Dana Eleven One Twelve Twelve Months Month Months Months Ended Ended Ended Ended Dec. 31, Jan. 31, Dec. 31, Dec. 31, 2008 2008 2008 (1) 2007 ---- ---- -------- ---- EBITDA $259 $42 $301 $450 Depreciation (269) (23) (292) (278) Amortization (96) (96) Realignment (114) (12) (126) (205) DCC EBIT (2) (2) 38 Goodwill impairment (169) (169) (89) Impairment of investments and other assets (14) (14) Reorganization items, net (25) (98) (123) (275) Loss on repayment of debt (10) (10) Strategic transaction expenses (10) (10) Loss on sale of assets, net (10) (10) (9) Stock compensation expense (6) (6) Foreign exchange on intercompany loans and market value adjustments on hedges (3) (3) 44 Divestiture gains Interest expense (142) (8) (150) (105) Interest income 48 4 52 42 Fresh start accounting adjustments 1,009 1,009 ----- ----- Income (loss) from continuing operations before income taxes $(563) $914 $351 $(387) ===== ==== ==== ===== Operating cash flow $(897) $(122) $(1,019) $(52) Bankruptcy emergence payments 833 55 888 27 Purchases of property, plant And equipment (234) (16) (250) (254) ---- --- ---- ---- Free cash flow $(298) $(83) $(381) $(279) ===== ==== ===== ===== (1) See "Non-GAAP Measures" in body of press release for comments regarding the presentation of combined information for the twelve months ended December 31, 2008.Photo: http://www.newscom.com/cgi-bin/prnh/19990903/DANA
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SOURCE: Dana Holding Corporation
Web site: http://www.dana.com/