Dana Holding Corporation Reports First-Quarter 2009 Results, Announces Debt Repurchase Program
PRNewswire
TOLEDO, Ohio
(NYSE:DAN)
May 7, 2009
- Market weakness drives 47-percent sales decline compared to first quarter of 2008
- Operations aggressively right-sizing to new production levels
- 2009 plan on track despite weak global markets
TOLEDO, Ohio, May 7 /PRNewswire-FirstCall/ -- Dana Holding Corporation today announced its first-quarter 2009 results.
(Logo: http://www.newscom.com/cgi-bin/prnh/19990903/DANA)
First-quarter highlights included:
- Sales of $1,216 million, a 47-percent decrease compared with 2008, primarily related to lower vehicle production across all market segments.
- Net loss of $160 million, compared with first-quarter 2008 net income of $663 million. The 2008 results included a one-time gain of $754 million after taxes, related to emergence and adoption of fresh start accounting. Excluding the one-time gain, the comparable first-quarter 2008 net loss was $91 million.
- Earnings before interest, taxes, depreciation, amortization, and restructuring (EBITDA) of $16 million, compared with $134 million in 2008. The negative impacts associated with volume declines were partially offset by improved operational performance and pricing.
- A cash balance of $549 million and total liquidity of $687 million at March 31, 2009. Net debt was $679 million.
Declining Global Markets Weaken Results
"Our first-quarter results were hit hard by the continued global recession," said Dana Chairman & CEO John Devine. "Despite this backdrop, we are making good progress on improving our business through cost reductions, right-sizing our operations, and improving margins and working capital. During the first quarter, we reduced our global workforce by nearly 5,000 employees and reduced fixed costs, achieving total cost reductions of approximately $300 million.
"These efforts have helped preserve adequate liquidity," Devine added. "At the same time, we also are securing profitable new business with global customers, which will benefit Dana moving forward."
The effects of the current economic downturn continued during the first quarter of 2009. First-quarter North American light vehicle production decreased by 51 percent compared with the same period last year. Outside North America, light vehicle production declined by 34 percent. Quarterly North American production of Class 8 trucks was down 40 percent and production of medium-duty trucks declined by 44 percent compared with the same period one year ago. Dana's off-highway sales decreased by 47 percent globally compared with the first quarter of 2008.
Dana Initiates Debt Repurchase Program
Dana also announced today that it is initiating a Dutch auction tender program to repurchase up to 10 percent of the existing $1.26 billion under its Term Loan Facility. The company anticipates that the repurchase activity under this program will be completed later this month.
Dana to Host First-Quarter Conference Call at 10:30 a.m. Today
Dana will discuss its first-quarter results in a conference call at 10:30 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. # 95720792). International locations should call 1-706-758-0054 (Conference I.D. # 95720792). Please ask for the Dana Holding Corporation Financial Webcast and Conference Call. Phone registration will be available beginning at 10 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 the conference I.D. number 95720792. 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 2 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 two 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 24,000 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 March 31, 2009 and 2008
Dana Combined (1) Dana Prior Dana
Three Months Three Months Two Months One Month
Ended Ended Ended Ended
March 31, March 31, March 31, January 31,
2009 2008 2008 2008
---------- ---------- ---------- ----------
Net sales $1,216 $2,312 $1,561 $751
Costs and expenses
Cost of sales 1,233 2,205 1,503 702
Selling,
general and
administrative
expenses 75 99 65 34
Amortization of
intangibles 17 12 12
Realignment
charges, net 50 17 5 12
Other
income, net 29 40 32 8
---------- ---------- ---------- ----------
Income (loss) from
continuing operations
before interest,
reorganization items
and income taxes (130) 19 8 11
Interest expense
(contractual interest
of $17 for the one
month ended January
31, 2008) 35 35 27 8
Reorganization items 1 107 9 98
Fresh start accounting
adjustments 1,009 1,009
---------- ---------- ---------- ----------
Income (loss) from
continuing operations
before income taxes (166) 886 (28) 914
Income tax benefit
(expense) 9 (219) (20) (199)
Equity in earnings of
affiliates (3) 3 1 2
---------- ---------- ---------- ----------
Income (loss) from
continuing operations (160) 670 (47) 717
Loss from discontinued
operations (7) (1) (6)
---------- ---------- ---------- ----------
Net income (loss) (160) 663 (48) 711
Less: Net loss
(income)
attributable to
noncontrolling
interests 3 (4) (2) (2)
---------- ---------- ---------- ----------
Net income (loss)
attributable to
the parent company (157) 659 (50) 709
Preferred stock
dividend
requirements 8 5 5
---------- ---------- ---------- ----------
Net income (loss)
available to
common
stockholders $(165) $654 $(55) $709
========== ========== ========== ==========
Income (loss) per
share from
continuing
operations
attributable to
parent company
stockholders:
Basic $(1.64) $(0.54) $4.77
Diluted $(1.64) $(0.54) $4.75
Loss per share from
discontinued
operations
attributable to
parent company
stockholders:
Basic $- $(0.01) $(0.04)
Diluted $- $(0.01) $(0.04)
Net income (loss)
per share
attributable to
parent company
stockholders:
Basic $(1.64) $(0.55) $4.73
Diluted $(1.64) $(0.55) $4.71
Average common shares
outstanding
Basic 100 100 150
Diluted 100 100 150
(1) See "Non-GAAP Measures" in body of press release for comments
regarding the presentation of combined information for the three
months ended March 31, 2008.
DANA HOLDING CORPORATION
Consolidated Balance Sheet (Unaudited)
As of March 31, 2009 and December 31, 2008
March 31, December 31,
Assets 2009 2008
------------ ------------
Current assets
Cash and cash equivalents $549 $777
Accounts receivable
Trade, less allowance for
doubtful accounts of $21
in 2009 and $23 in 2008 804 827
Other 188 170
Inventories
Raw materials 337 394
Work in process and finished
goods 434 521
Other current assets 117 58
---------- ----------
Total current assets 2,429 2,747
Goodwill 103 108
Intangibles 538 569
Investments and other assets 187 207
Investments in affiliates 132 135
Property, plant and equipment, net 1,758 1,841
---------- ----------
Total assets $5,147 $5,607
========== ==========
Liabilities and equity
Current liabilities
Notes payable, including current
portion of long-term debt $44 $70
Liability for advance received on
corporate facility sale 11
Accounts payable 613 824
Accrued payroll and employee
benefits 168 185
Taxes on income 89 93
Other accrued liabilities 257 274
---------- ----------
Total current liabilities 1,182 1,446
Long-term debt 1,184 1,181
Deferred employee benefits and
other non-current liabilities 886 845
Commitments and contingencies
(Note 18)
---------- ----------
Total liabilities 3,252 3,472
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 authorized,
100,074,997 issued and
outstanding 1 1
Additional paid-in capital 2,323 2,321
Accumulated deficit (871) (706)
Accumulated other comprehensive
loss (428) (359)
---------- ----------
Total parent company
stockholders' equity 1,796 2,028
Noncontrolling interests 99 107
---------- ----------
Total equity 1,895 2,135
---------- ----------
Total liabilities and
equity $5,147 $5,607
========== ==========
DANA HOLDING CORPORATION
Consolidated Statement of Cash Flows (Unaudited)
For the Three Months Ended March 31, 2009 and 2008
Dana Combined Dana Prior Dana
Three Months Three Months Two Months One Month
Ended Ended Ended Ended
March 31, March 31, March 31, January 31,
2009 2008 (1) 2008 2008
----------- ----------- ----------- ----------
Cash flows −
operating
activities
Income (loss)
attributable to
the parent company $(157) $659 $(50) $709
Income (loss)
attributable to
noncontrolling
interests (3) 4 2 2
-------- -------- -------- --------
Net income (loss) (160) 663 (48) 711
Depreciation 73 70 47 23
Amortization of
intangibles 21 15 15
Amortization of
inventory valuation 45 45
Amortization of
deferred financing
charges and original
issue discount 7 4 4
Deferred income taxes (13) 189 (2) 191
Reorganization:
Gain on settlement
of liabilities
subject to
compromise (27) (27)
Payment of
claims (2) (88) (88)
Reorganization items
net of cash payments (1) 61 (18) 79
Fresh start
Adjustments (1,009) (1,009)
Payments to
VEBAs (2) (788) (733) (55)
Loss (gain) on sale of
businesses and assets (1) 8 1 7
Change in working
capital (112) (189) (128) (61)
Other, net 12 (3) (22) 19
-------- -------- -------- --------
Net cash flows
used in operating
activities (2) (174) (1,049) (927) (122)
Cash flows −
investing
activities
Purchases of
property, plant and
equipment (2) (30) (45) (29) (16)
Proceeds from sale
of businesses and
assets 5 5
Change in restricted
cash 93 93
Other 3 8 (5)
-------- -------- -------- --------
Net cash flows
provided by
(used in)
investing
activities (30) 56 (21) 77
Cash flows −
financing
activities
Repayment of
debtor-in-
possession
facility (900) (900)
Net change in
short-term debt (24) (25) (7) (18)
Proceeds from sale
of fixed assets 11
Payment of DCC Medium
Term Notes (136) (136)
Proceeds from Exit
Facility debt 1,430 80 1,350
Original issue
discount (114) (114)
Deferred financing
payments (40) (40)
Repayment of Exit
Facility debt (3) (4) (4)
Issuance of Series
A and Series B
preferred stock 771 771
Other 2 (6) (5) (1)
-------- -------- -------- --------
Net cash flows
provided by
(used in)
financing
activities (14) 976 64 912
Net increase
(decrease) in
cash and cash
equivalents (218) (17) (884) 867
Cash and cash
equivalents −
beginning of
period 777 1,271 2,147 1,271
Effect of
exchange rate
changes on
cash balances (10) 25 20 5
Net change in
cash of discontinued
operations 4 4
-------- -------- -------- --------
Cash and cash
equivalents −
end of period $549 $1,283 $1,283 $2,147
========= ======== ======== ========
(1) See "Non-GAAP Measures" in body of press release for comments
regarding the presentation of combined information for the three
months ended March 31, 2008.
(2) Free cash flow of ($204) in 2009 and ($218) in 2008 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
For the Three Months Ended March 31, 2009 and 2008
Dana Combined (1) Dana Prior Dana
Three Months Three Months Two Months One Month
Ended Ended Ended Ended
March 31, March 31, March 31, January 31,
SALES 2009 2008 2008 2008
--------- --------- --------- ---------
Light Vehicle
Driveline $424 $861 $579 $282
Sealing 117 195 131 64
Thermal 39 80 52 28
Structures 117 270 180 90
Commercial Vehicle 257 405 276 129
Off-Highway 262 499 342 157
Other 2 1 1
------ ------ ------ -----
Total Sales $1,216 $2,312 $1,561 $751
====== ====== ====== =====
EBITDA
Light Vehicle
Driveline $(7) $37 $27 $10
Sealing (2) 19 13 6
Thermal 1 6 3 3
Structures 8 18 14 4
Commercial Vehicle 6 22 16 6
Off-Highway 11 42 28 14
------ ------ ------ -----
Segment EBITDA 17 144 101 43
Shared services and
administrative (5) (6) (3) (3)
Other income
(expense), net (1) (6) (4) (2)
Foreign exchange
not in segments 5 2 2
------ ------ ------ -----
EBITDA $16 $134 $96 $38
====== ====== ====== =====
(1) See "Non-GAAP Measures" in body of press release for comments
regarding the presentation of combined information for the three
months ended March 31, 2008.
DANA HOLDING CORPORATION
SEGMENT EBITDA RECONCILIATION (Unaudited)
Reconciliation of Segment EBITDA to Income (Loss)
from Continuing Operations Before Income Taxes
For the Three Months Ended March 31, 2009 and 2008
Dana Combined (1) Dana Prior Dana
Three Months Three Months Two Months One Month
Ended Ended Ended Ended
March 31, March 31, March 31, January 31,
2009 2008 2008 2008
--------- --------- --------- ---------
Segment EBITDA $17 $144 $101 $43
Shared services
and administrative (5) (6) (3) (3)
Other income
(expense), net (1) (6) (4) (2)
Foreign exchange
not in segments 5 2 2
------ ------ ------ -----
EBITDA 16 134 96 38
Depreciation (73) (70) (47) (23)
Amortization (21) (60) (60)
Realignment (50) (17) (5) (12)
Reorganization
items, net (1) (107) (9) (98)
Loss on sale of
assets, net (1)
Stock compensation
expense (2)
Foreign exchange
on intercompany
loans and market
value adjustments
on hedges (5) 17 13 4
Interest expense (35) (35) (27) (8)
Interest income 6 15 11 4
Fresh start
accounting
adjustments 1,009 1,009
Income (loss)
from continuing
operations
before income ------ ------ ------ ------
taxes $(166) $886 $(28) $914
====== ====== ====== ======
(1) See "Non-GAAP Measures" in body of press release for comments
regarding the presentation of combined information for the three
months ended March 31, 2008.
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SOURCE: Dana Holding Corporation
Web site: http://www.dana.com/