Dana Holding Corporation Reports Third-Quarter Profit of $46 Million; Achieves Positive Free Cash Flow for Sixth Consecutive Quarter, Raises Full-Year Guidance

Oct 28, 2010

MAUMEE, Ohio, Oct. 28 /PRNewswire-FirstCall/ -- Dana Holding Corporation (NYSE: DAN) today announced strong third-quarter 2010 results.  Highlights for the quarter included:

  • Delivering positive net income of $46 million
  • Achieving adjusted EBITDA of $148 million on sales of $1.5 billion with adjusted EBITDA margin of 9.8 percent
  • Raising full-year adjusted EBITDA outlook to a range of $530 million to $550 million
  • Generating free cash flow of $59 million, marking sixth consecutive positive quarter
  • Increasing net cash position to $184 million

The company reported quarterly net income of $46 million, a substantial increase over the net loss of $38 million reported during the same period last year.  Third-quarter adjusted EBITDA was $148 million, a 47-percent improvement over the $101 million reported for the same period in 2009, and adjusted EBITDA margin for the quarter improved to 9.8 percent, compared with 7.6 percent one year ago.  Sales for the period were $1,516 million, up from $1,329 million for the third quarter last year.

Dana achieved positive free cash flow for the sixth consecutive quarter, generating $59 million during the third quarter, compared to free cash flow of $145 million one year ago.  Total cash at the end of the third quarter was $1,137 million, resulting in a net cash position of $184 million – an increase of $64 million from the end of the prior quarter and $240 million from the end of last year.

As a result of its solid third-quarter performance and based on its anticipated 2010 full-year sales of approximately $6 billion, the company has improved its full-year adjusted EBITDA outlook to a range of $530 million to $550 million.  Dana has also indicated that it now expects to achieve positive free cash flow in a range of $275 million to $300 million in 2010.

"Dana had a strong third quarter with adjusted EBITDA of $148 million and a substantial improvement in profits," said Dana President and Chief Executive Officer Jim Sweetnam.  "I am particularly pleased that we've begun to demonstrate consistent performance, as evidenced by several consecutive quarters of increasingly positive results.  This is the result of sound execution by our global team.

"Each of our business segments – light vehicle driveline, power technologies, commercial vehicle, and off-highway – again generated increases in EBITDA during the third quarter," he added. "This speaks to the solid progress we continue to make in reinforcing our competitive position and in winning profitable net new business in growing markets."

Nine-Month Results

Adjusted EBITDA for the nine months ended September 30, 2010, was $410 million, a nearly $200 million increase from $211 million during the period last year.  Sales for the first nine months of 2010 were $4,550 million, which compares with $3,735 million during the same period one year ago.  Dana swung to net income of $24 million in the first nine months of 2010, compared to a net loss of $195 million during the same period in 2009.

Dana to Host Third-Quarter Conference Call at 11 a.m. Today

Dana will discuss its third-quarter results in a conference call at 11 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 website.  To dial into the conference call, domestic locations should call 1-888-311-4590 (Conference I.D. # 16259366).  International locations should call 1-706-758-0054 (Conference I.D. # 16259366).  Please ask for the Dana Holding Corporation Financial Webcast and Conference Call.  Phone registration will be available beginning at 10:30 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 Conference I.D. # 16259366.  A webcast replay will also be available after 5 p.m. today, and may be accessed via the Dana Investor website.

Non-GAAP Measures

This release refers to adjusted EBITDA, which we've defined to be earnings before interest, taxes, depreciation, amortization, non-cash equity grant expense, restructuring expense, and other nonrecurring items (gain/loss on debt extinguishment or divestitures, impairment, etc).  Adjusted EBITDA is a non-GAAP financial measure, and the measure currently being used by Dana as the primary measure of its operating segment performance.  The most significant impact to Dana's ongoing results of operations as a result of applying fresh start accounting following our emergence from bankruptcy was higher depreciation and amortization.

By using adjusted EBITDA, which is a performance measure that excludes depreciation and amortization, the comparability of results was enhanced.  Management also believes that adjusted EBITDA is an important measure since the financial covenants of our primary debt agreements are adjusted EBITDA-based, and our management incentive performance programs are based, in part, on adjusted EBITDA.  Because it is a non-GAAP measure, adjusted EBITDA should not be considered a substitute for net income (loss) or other reported results prepared in accordance with GAAP.  The financial information accompanying this release provides a reconciliation of adjusted EBITDA for the periods presented to the reported income (loss) before income taxes, which is a GAAP measure.

Free cash flow is also a non-GAAP financial measure, which we have defined as Cash provided by operations (a GAAP measure) exclusive of any bankruptcy claim-related payments included therein, less capital spending.  This measure is useful in evaluating the operational cash flow of the company inclusive of the spending required to maintain the operations.  

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 driveline products (axles and driveshafts), power technologies (sealing and thermal-management products), and genuine service parts for light and heavy manufacturers.  The company's customer base includes virtually every major vehicle manufacturer in the global automotive, commercial vehicle, and off-highway markets.  Based in Maumee, Ohio, the company employs approximately 22,500 people in 26 countries and reported 2009 sales of $5.2 billion.  For more information, please visit: www.dana.com.

DANA HOLDING CORPORATION




Consolidated Statement of Operations (Unaudited)




For the Three Months Ended September 30, 2010 and 2009









Three Months Ended

(In millions except per share amounts)

September 30,


2010


2009

Net sales

$ 1,516


$ 1,329

Costs and expenses




    Cost of sales

1,338


1,247

    Selling, general and administrative expenses

99


73

    Amortization of intangibles

15


18

    Restructuring charges, net

10


14

    Other income, net

10


10

Income (loss) before interest, reorganization




    items and income taxes

64


(13)

Interest expense

22


36

Income (loss) before income taxes

42


(49)

Income tax benefit

4


9

Equity in earnings of affiliates

1


2

Net income (loss)

47


(38)

    Less: Noncontrolling interests net income

1



Net income (loss) attributable to the parent company

46


(38)

Preferred stock dividend requirements

8


8

Net income (loss) available to common stockholders

$      38


$    (46)





Net income (loss) per share available to




    parent company stockholders:




   Basic

$   0.27


$ (0.45)

   Diluted

$   0.22


$ (0.45)

Average common shares outstanding




   Basic

141


101

   Diluted

212


101



DANA HOLDING CORPORATION




Consolidated Statement of Operations (Unaudited)




For the Nine Months Ended September 30, 2010 and 2009









Nine Months Ended

(In millions except per share amounts)

September 30,


2010


2009

Net sales

$ 4,550


$ 3,735

Costs and expenses




    Cost of sales

4,063


3,598

    Selling, general and administrative expenses

292


217

    Amortization of intangibles

46


53

    Restructuring charges, net

60


93

    Impairment of long-lived assets



6

    Other income, net

9


100

Income (loss) before interest, reorganization




    items and income taxes

98


(132)

Interest expense

68


108

Reorganization items



(2)

Income (loss) before income taxes

30


(238)

Income tax benefit (expense)

(10)


39

Equity in earnings of affiliates

7


(2)

Net income (loss)

27


(201)

    Less: Noncontrolling interests net income (loss)

3


(6)

Net income (loss) attributable to the parent company

24


(195)

Preferred stock dividend requirements

24


24

Net income (loss) available to common stockholders

$         -


$  (219)





Net income (loss) per share available to




    parent company stockholders:




   Basic

$       -


$ (2.17)

   Diluted

$       -


$ (2.17)

Average common shares outstanding




   Basic

140


100

   Diluted

140


100



DANA HOLDING CORPORATION




Consolidated Balance Sheet (Unaudited)




As of September 30, 2010 and December 31, 2009










(In millions except per share amounts)







September 30,


December 31,

Assets

2010


2009

Current assets




Cash and cash equivalents

$              1,137


$               947

Accounts receivable





Trade, less allowance for doubtful accounts





of $12 in 2010 and $18 in 2009

901


728


Other

172


141

Inventories





Raw materials

322


300


Work in process and finished goods

367


308

Other current assets

91


59

Current assets held for sale

5


99



Total current assets

2,995


2,582

Goodwill

106


111

Intangibles

373


438

Investments and other assets

225


233

Investments in affiliates

117


112

Property, plant and equipment, net

1,351


1,484

Noncurrent assets held for sale

3


104



Total assets

$              5,170


$            5,064







Liabilities and equity




Current liabilities




Notes payable, including current portion of long-term debt

$                   50


$                 34

Accounts payable

807


601

Accrued payroll and employee benefits

149


103

Accrued restructuring costs

37


29

Taxes on income

19


40

Other accrued liabilities

277


270

Current liabilities held for sale

2


79



Total current liabilities

1,341


1,156

Long-term debt

903


969

Deferred employee benefits and other noncurrent liabilities

1,127


1,160

Commitments and contingencies






Total liabilities

3,371


3,285

Parent company stockholders' equity





Preferred stock, 50,000,000 shares authorized






Series A, $0.01 par value, 2,500,000 issued and outstanding

242


242



Series B, $0.01 par value, 5,400,000 issued and outstanding

529


529


Common stock, $0.01 par value, 450,000,000 shares authorized,






141,143,311 outstanding

1


1


Additional paid-in capital

2,592


2,580


Accumulated deficit

(1,169)


(1,169)


Treasury stock, at cost

(2)




Accumulated other comprehensive loss

(492)


(504)



Total parent company stockholders' equity

1,701


1,679

Noncontrolling interests

98


100



Total equity

1,799


1,779



Total liabilities and equity

$              5,170


$            5,064



DANA HOLDING CORPORATION




Consolidated Statement of Cash Flows (Unaudited)




For the Three Months Ended September 30, 2010 and 2009





















Three Months Ended

(In millions)

September 30,



2010


2009

Cash flows − operating activities




Net income (loss)

$      47


$ (38)

Depreciation

57


79

Amortization of intangibles

19


22

Amortization of deferred financing charges and original issue discount

7


9

Loss on extinguishment of debt

3


5

Deferred income taxes

(4)


(5)

Pension expense in excess of (less than) contributions

4



Change in working capital

(43)


84

Other, net

5


9

Net cash flows provided by operating activities (1)

95


165






Cash flows − investing activities




Purchases of property, plant and equipment (1)

(36)


(20)

Other

(2)


1

Net cash flows used in investing activities

(38)


(19)






Cash flows − financing activities




Net change in short-term debt



(1)

Proceeds from long-term debt

51


2

Repayment of long-term debt

(47)


(115)

Proceeds from issuance of common stock



229

Underwriting fee payment



(12)

Dividends paid to preferred stockholders

(16)



Dividends paid to noncontrolling interests

(4)


(5)

Other

1


1

Net cash flows provided by (used in) financing activities

(15)


99






Net increase in cash and cash equivalents

42


245

Cash and cash equivalents − beginning of period

1,059


553

Effect of exchange rate changes on cash balances

36


16

Cash and cash equivalents − end of period

$ 1,137


$ 814











(1)   Free cash flow of $59 in 2010 and $145 in 2009 is the sum of net cash provided by    

 operating activities reduced by the purchases of property, plant and equipment.  



DANA HOLDING CORPORATION




Consolidated Statement of Cash Flows (Unaudited)




For the Nine Months Ended September 30, 2010 and 2009





















Nine Months Ended

($ in millions)

September 30,



2010


2009

Cash flows − operating activities




Net income (loss)

$      27


$ (201)

Depreciation

180


231

Amortization of intangibles

57


64

Amortization of deferred financing charges and original issue discount

20


27

Loss on sale of business

5



Loss (gain) on extinguishment of debt

7


(35)

Reorganization-related tax claim payment (1)

(75)



Deferred income taxes

(10)


(31)

Pension expense in excess of (less than) contributions

13


(5)

Change in working capital

(10)


49

Other, net

3


(11)

Net cash flows provided by operating activities (1)

217


88






Cash flows − investing activities




Purchases of property, plant and equipment (1)

(62)


(74)

Proceeds from sale of businesses

113



Other

3


3

Net cash flows provided by (used in) investing activities

54


(71)






Cash flows − financing activities




Net change in short-term debt

13


(36)

Advance received on corporate facility sale



11

Proceeds from long-term debt

52


5

Repayment of long-term debt

(135)


(197)

Proceeds from issuance of common stock



229

Underwriting fee payment



(12)

Dividends paid to preferred stockholders

(32)



Dividends paid to noncontrolling interests

(6)


(5)

Other

2


(2)

Net cash flows used in financing activities

(106)


(7)






Net increase in cash and cash equivalents

165


10

Cash and cash equivalents − beginning of period

947


777

Effect of exchange rate changes on cash balances

25


27

Cash and cash equivalents − end of period

$ 1,137


$  814











(1)   Free cash flow of $230 in 2010 and $14 in 2009 is the sum of net cash provided by    

 operating activities (exclusive of reorganization-related claims payments) reduced by  

 the purchases of property, plant and equipment.  



DANA HOLDING CORPORATION




Segment Sales and Adjusted EBITDA (Unaudited)



For the Three Months Ended September 30, 2010 and 2009



















($ in millions)

Three Months Ended




September 30,



SALES

2010


2009



Light Vehicle Driveline

$    634


$    532



Power Technologies

235


186



Commercial Vehicle

362


270



Off-Highway

271


184



Structures

13


157



Other

1





Total Sales

$ 1,516


$ 1,329









Adjusted EBITDA






Light Vehicle Driveline

$      67


$      45



Power Technologies

33


14



Commercial Vehicle

37


27



Off-Highway

23


11



Structures



11



Segment EBITDA

160


108



Shared services and administrative

(4)


(5)



Other expense, net

(6)


(2)



Foreign exchange not in segments

(2)





Adjusted EBITDA

$    148


$    101





DANA HOLDING CORPORATION




Segment Sales and Adjusted EBITDA (Unaudited)



For the Nine Months Ended September 30, 2010 and 2009



















($ in millions)

Nine Months Ended




September 30,



SALES

2010


2009



Light Vehicle Driveline

$ 1,861


$ 1,393



Power Technologies

697


503



Commercial Vehicle

999


796



Off-Highway

815


640



Structures

175


403



Other

3





Total Sales

$ 4,550


$ 3,735









Adjusted EBITDA






Light Vehicle Driveline

$    177


$      76



Power Technologies

95


14



Commercial Vehicle

96


56



Off-Highway

69


27



Structures

8


20



Segment EBITDA

445


193



Shared services and administrative

(13)


(15)



Other income (expense), net

(15)


30



Foreign exchange not in segments

(7)


3



Adjusted EBITDA

$    410


$    211





DANA HOLDING CORPORATION




Reconciliation of Segment and Adjusted EBITDA to




Income (Loss) Before Income Taxes (Unaudited)




For the Three Months Ended September 30, 2010 and 2009





















($ in millions)

Three Months Ended




September 30,




2010


2009



Segment EBITDA

$ 160


$ 108



Shared services and administrative

(4)


(5)



Other expense, net

(6)


(2)



Foreign exchange not in segments

(2)





Adjusted EBITDA

148


101



Depreciation

(57)


(79)



Amortization

(19)


(22)



Restructuring

(10)


(14)



Loss on extinguishment of debt

(3)


(5)



Strategic transaction expenses



(2)



Loss on sale of assets, net

(1)


(1)



Stock compensation expense

(4)


(3)



Foreign exchange on intercompany loans






and market value adjustments on forwards

2


6



Interest expense

(22)


(36)



Interest income

8


6



Income (loss) before income taxes

$   42


$ (49)





DANA HOLDING CORPORATION




Reconciliation of Segment and Adjusted EBITDA to




Income (Loss) Before Income Taxes (Unaudited)




For the Nine Months Ended September 30, 2010 and 2009
















($ in millions)

Nine Months Ended


September 30,


2010


2009

Segment EBITDA

$ 445


$  193

Shared services and administrative

(13)


(15)

Other income (expense), net

(15)


30

Foreign exchange not in segments

(7)


3

Adjusted EBITDA

410


211

Depreciation

(180)


(231)

Amortization

(57)


(64)

Restructuring

(60)


(93)

Impairment



(6)

Reorganization items, net



2

Gain (loss) on extinguishment of debt

(7)


35

Strategic transaction expenses



(4)

Loss on sale of assets, net

(7)


(2)

Stock compensation expense

(9)


(7)

Foreign exchange on intercompany loans, Venezuelan currency




devaluation and market value adjustments on forwards

(13)


11

Interest expense

(68)


(108)

Interest income

21


18

Income (loss) before income taxes

$   30


$ (238)



SOURCE Dana Holding Corporation


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