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.
Photo: http://www.newscom.com/cgi-bin/prnh/19990903/DANA
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SOURCE: Dana Holding Corporation

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


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