Dana Incorporated Reports Strong 2021 First-quarter Financial Results; Including Higher Sales; Raises Full-year Guidance
Dana reported first-quarter 2021 sales of $2.3 billion, up $337 million from last year, driven by strong demand in the light-truck, commercial-vehicle, and off-highway markets. Net income attributable to Dana rose to $71 million, with diluted EPS of $0.48. Adjusted EBITDA increased to $234 million, reflecting a 10.3% margin. Operating cash flow improved to $27 million. The company has revised its full-year sales guidance to $8.50 to $9.00 billion and adjusted EBITDA guidance to $920 million to $1.0 billion.
- Sales increased by $337 million to $2.3 billion.
- Net income rose by $13 million to $71 million.
- Diluted adjusted EPS increased by $0.19 to $0.66.
- Adjusted EBITDA improved to $234 million with a margin of 10.3%.
- Operating cash flow turned positive at $27 million.
- Increased costs related to supply-chain disruptions and shipping constraints.
MAUMEE, Ohio, April 28, 2021 /PRNewswire/ --
Key Highlights
- Sales of
$2.3 billion , an increase of$337 million - Net income attributable to Dana of
$71 million , an increase of$13 million - Diluted EPS of
$0.48 , an increase of$0.08 - Adjusted net income attributable to Dana of
$97 million , an increase of$29 million - Adjusted EBITDA of
$234 million , margin of 10.3 percent of sales - Diluted adjusted EPS of
$0.66 - Operating cash flow of
$27 million - Acquisition of Pi Innovo LLC, further enhances e-Propulsion software, controls, and electronics capabilities
Dana Incorporated (NYSE: DAN) today announced financial results for the first quarter of 2021.
"Dana realized higher sales of
"While our end-markets have recovered from last year's shutdowns, higher costs related to supply-chain disruptions and shipping constraints continue to challenge the mobility industry. Our established multi-end-market presence tempers these outside pressures as we continue to execute our enterprise strategy, launch our significant new business backlog, and focus on strengthening our vehicle electrification position."
First-quarter 2021 Financial Results
Sales for the first quarter of 2021 totaled
Adjusted EBITDA for the first quarter of 2021 was
Adjusted net income attributable to Dana and diluted adjusted earnings per share were
Operating cash flow in the first quarter of 2021 was
Adjusted free cash flow was a use of
"As markets continue to recover from the challenges of the global pandemic, strong first-quarter sales provide the conviction to increase our full-year guidance as we accelerate the achievement of our long-term growth targets," said Jonathan Collins, executive vice president and chief financial officer of Dana.
Revised 2021 Financial Targets1
- Sales of
$8.50 to$9.00 billion ; - Adjusted EBITDA of
$920 million to$1.0 billion , an implied adjusted EBITDA margin of approximately 11 percent at the midpoint of the range; - Diluted adjusted EPS of
$2.10 to$2.60 ; - Operating cash flow of approximately 7 to 8 percent of sales; and
- Adjusted free cash flow of approximately 3 to 3.5 percent of sales.
1 | Net income and diluted EPS guidance are not provided, as discussed below in Non-GAAP Financial Information. |
Dana to Host Conference Call at 9 a.m. Wednesday, April 28
Dana will discuss its first-quarter results in a conference call at 9 a.m. EDT on Wednesday, April 28. Participants may listen to the audio portion of the conference call either through audio streaming online or by telephone. Slide viewing is available online via a link provided on the Dana investor website: www.dana.com/investors. U.S. and Canadian locations should dial 1-888-311-4590 and international locations should call 1-706-758-0054. Please enter conference I.D. 8399308 and ask for "Dana Incorporated's Financial Webcast and Conference Call." Phone registration will be available beginning at 8:30 a.m. EDT.
An audio recording of the webcast will be available after 5 p.m. EDT on April 28 by dialing 1-855-859-2056 (U.S. or Canada) or 1-404-537-3406 (international) and entering conference I.D. 8399308. A webcast replay will also be available after 5 p.m. EDT and may be accessed via Dana's investor website.
Non-GAAP Financial Information
Adjusted EBITDA is a non-GAAP financial measure which we have defined as net income (loss) before interest, income taxes, depreciation, amortization, equity grant expense, restructuring expense, non-service cost components of pension and other postretirement benefit costs and other adjustments not related to our core operations (gain/loss on debt extinguishment, pension settlements, divestitures, impairment, etc.). Adjusted EBITDA is a measure of our ability to maintain and continue to invest in our operations and provide shareholder returns. We use adjusted EBITDA in assessing the effectiveness of our business strategies, evaluating and pricing potential acquisitions and as a factor in making incentive compensation decisions. In addition to its use by management, we also believe adjusted EBITDA is a measure widely used by securities analysts, investors and others to evaluate financial performance of our company relative to other Tier 1 automotive suppliers. Adjusted EBITDA should not be considered a substitute for earnings (loss) before income taxes, net income (loss) or other results reported in accordance with GAAP. Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.
Adjusted net income (loss) attributable to the parent company is a non-GAAP financial measure which we have defined as net income (loss) attributable to the parent company, excluding any discrete income tax items, restructuring charges, amortization expense and other adjustments not related to our core operations (as used in adjusted EBITDA), net of any associated income tax effects. This measure is considered useful for purposes of providing investors, analysts and other interested parties with an indicator of ongoing financial performance that provides enhanced comparability to net income attributable to the parent company reported by other companies. Adjusted net income (loss) attributable to the parent company is neither intended to represent nor be an alternative measure to net income (loss) attributable to the parent company reported in accordance with GAAP.
Diluted adjusted EPS is a non-GAAP financial measure which we have defined as adjusted net income (loss) attributable to the parent company divided by adjusted diluted shares. We define adjusted diluted shares as diluted shares as determined in accordance with GAAP based on adjusted net income (loss) attributable to the parent company. This measure is considered useful for purposes of providing investors, analysts and other interested parties with an indicator of ongoing financial performance that provides enhanced comparability to EPS reported by other companies. Diluted adjusted EPS is neither intended to represent nor be an alternative measure to diluted EPS reported in accordance with GAAP.
Free cash flow is a non-GAAP financial measure which we have defined as net cash provided by (used in) operating activities less purchases of property, plant and equipment. Adjusted free cash flow is a non-GAAP financial measure which we have defined as net cash provided by (used in) operating activities excluding discretionary pension contributions less purchases of property, plant and equipment. We believe these measures are useful to investors in evaluating the operational cash flow of the company inclusive of the spending required to maintain the operations. Free cash flow and adjusted free cash flow are not intended to represent nor be an alternative to the measure of net cash provided by (used in) operating activities reported in accordance with GAAP. Free cash flow and adjusted free cash flow may not be comparable to similarly titled measures reported by other companies.
We have not provided reconciliations of our adjusted EBITDA and diluted adjusted EPS outlook to the most comparable GAAP measures of net income and diluted EPS. Providing net income and diluted EPS guidance is potentially misleading and not practical given the difficulty of projecting event-driven transactional and other non-core operating items that are included in net income and diluted EPS, including restructuring actions, asset impairments, and income tax valuation adjustments. Reconciliations of these non-GAAP measures with the most comparable GAAP measures for historical periods are indicative of the reconciliations that will be prepared upon completion of the periods covered by the non-GAAP guidance. Please reference the "Non-GAAP Financial Information" accompanying our quarterly earnings conference call presentations on our website at www.dana.com/investors for our GAAP results and the reconciliations of these measures, were used, to the comparable GAAP measures.
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," and 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 Incorporated
Dana is a leader in the design and manufacture of highly efficient propulsion and energy-management solutions for all mobility markets across the globe. The company's conventional and clean-energy solutions support nearly every vehicle manufacturer with drive and motion systems; electrodynamic technologies, including software and controls; and thermal, sealing, and digital solutions.
Based in Maumee, Ohio, USA, the company reported sales of
DANA INCORPORATED | |||||
Consolidated Statement of Operations (Unaudited) | |||||
For the Three Months Ended March 31, 2021 and 2020 | |||||
Three Months Ended | |||||
(In millions, except per share amounts) | March 31, | ||||
2021 | 2020 | ||||
Net sales | $ 2,263 | $ 1,926 | |||
Costs and expenses | |||||
Cost of sales | 2,012 | 1,720 | |||
Selling, general and administrative expenses | 119 | 106 | |||
Amortization of intangibles | 4 | 3 | |||
Restructuring charges, net | 1 | 3 | |||
Impairment of goodwill | (51) | ||||
Other income (expense), net | (19) | 4 | |||
Earnings before interest and income taxes | 108 | 47 | |||
Interest income | 2 | 2 | |||
Interest expense | 34 | 29 | |||
Earnings before income taxes | 76 | 20 | |||
Income tax expense (benefit) | 22 | (16) | |||
Equity in earnings of affiliates | 14 | 2 | |||
Net income | 68 | 38 | |||
Less: Noncontrolling interests net income | 1 | 2 | |||
Less: Redeemable noncontrolling interests net loss | (4) | (22) | |||
Net income attributable to the parent company | $ 71 | $ 58 | |||
Net income per share available to common stockholders | |||||
Basic | $ 0.49 | $ 0.40 | |||
Diluted | $ 0.48 | $ 0.40 | |||
Weighted-average shares outstanding - Basic | 144.9 | 144.2 | |||
Weighted-average shares outstanding - Diluted | 146.4 | 144.8 | |||
DANA INCORPORATED | |||||||
Consolidated Statement of Comprehensive Income (Unaudited) | |||||||
For the Three Months Ended March 31, 2021 and 2020 | |||||||
Three Months Ended | |||||||
(In millions) | March 31, | ||||||
2021 | 2020 | ||||||
Net income | $ 68 | $ 38 | |||||
Other comprehensive income (loss), net of tax: | |||||||
Currency translation adjustments | (5) | (154) | |||||
Hedging gains and losses | (17) | 29 | |||||
Defined benefit plans | 3 | 3 | |||||
Other comprehensive loss | (19) | (122) | |||||
Total comprehensive income (loss) | 49 | (84) | |||||
Less: Comprehensive loss attributable to noncontrolling interests | 1 | 17 | |||||
Less: Comprehensive loss attributable to redeemable noncontrolling interests | 3 | 14 | |||||
Comprehensive income (loss) attributable to the parent company | $ 53 | $ (53) | |||||
DANA INCORPORATED | ||||||
Consolidated Balance Sheet (Unaudited) | ||||||
As of March 31, 2021 and December 31, 2020 | ||||||
(In millions, except share and per share amounts) | March 31, | December 31, | ||||
2021 | 2020 | |||||
Assets | ||||||
Current assets | ||||||
Cash and cash equivalents | $ 483 | $ 559 | ||||
Marketable securities | 26 | 21 | ||||
Accounts receivable | ||||||
Trade, less allowance for doubtful accounts of | 1,428 | 1,201 | ||||
Other | 237 | 231 | ||||
Inventories | 1,260 | 1,149 | ||||
Other current assets | 139 | 127 | ||||
Total current assets | 3,573 | 3,288 | ||||
Goodwill | 488 | 479 | ||||
Intangibles | 250 | 236 | ||||
Deferred tax assets | 613 | 611 | ||||
Other noncurrent assets | 153 | 169 | ||||
Investments in affiliates | 149 | 152 | ||||
Operating lease assets | 192 | 190 | ||||
Property, plant and equipment, net | 2,184 | 2,251 | ||||
Total assets | $ 7,602 | $ 7,376 | ||||
Liabilities and equity | ||||||
Current liabilities | ||||||
Short-term debt | $ 26 | $ 26 | ||||
Current portion of long-term debt | 8 | 8 | ||||
Accounts payable | 1,536 | 1,331 | ||||
Accrued payroll and employee benefits | 203 | 190 | ||||
Taxes on income | 44 | 35 | ||||
Current portion of operating lease liabilities | 42 | 43 | ||||
Other accrued liabilities | 311 | 308 | ||||
Total current liabilities | 2,170 | 1,941 | ||||
Long-term debt, less debt issuance costs of | 2,420 | 2,420 | ||||
Noncurrent operating lease liabilities | 157 | 154 | ||||
Pension and postretirement obligations | 463 | 479 | ||||
Other noncurrent liabilities | 340 | 368 | ||||
Total liabilities | 5,550 | 5,362 | ||||
Commitments and contingencies | ||||||
Redeemable noncontrolling interests | 182 | 180 | ||||
Parent company stockholders' equity | ||||||
Preferred stock, 50,000,000 shares authorized, no shares outstanding | - | - | ||||
Common stock, 450,000,000 shares authorized, | 2 | 2 | ||||
Additional paid-in capital | 2,415 | 2,408 | ||||
Retained earnings | 583 | 530 | ||||
Treasury stock, at cost (10,657,998 and 10,442,582 shares) | (161) | (156) | ||||
Accumulated other comprehensive loss | (1,044) | (1,026) | ||||
Total parent company stockholders' equity | 1,795 | 1,758 | ||||
Noncontrolling interests | 75 | 76 | ||||
Total equity | 1,870 | 1,834 | ||||
Total liabilities and equity | $ 7,602 | $ 7,376 | ||||
DANA INCORPORATED | |||||
Consolidated Statement of Cash Flows (Unaudited) | |||||
For the Three Months Ended March 31, 2021 and 2020 | |||||
Three Months Ended | |||||
(In millions) | March 31, | ||||
2021 | 2020 | ||||
Operating activities | |||||
Net income | $ 68 | $ 38 | |||
Depreciation | 88 | 85 | |||
Amortization | 7 | 4 | |||
Amortization of deferred financing charges | 2 | 2 | |||
Earnings of affiliates, net of dividends received | (14) | (2) | |||
Stock compensation expense | 5 | 4 | |||
Deferred income taxes | (6) | (35) | |||
Pension expense, net | 1 | ||||
Impairment of goodwill | 51 | ||||
Change in working capital | (133) | (183) | |||
Other, net | 10 | (16) | |||
Net cash provided by (used in) operating activities | 27 | (51) | |||
Investing activities | |||||
Purchases of property, plant and equipment | (53) | (63) | |||
Acquisition of businesses, net of cash acquired | (17) | (8) | |||
Purchases of marketable securities | (11) | (12) | |||
Proceeds from sales of marketable securities | 6 | 6 | |||
Settlements of undesignated derivatives | (3) | ||||
Other, net | 2 | (5) | |||
Net cash used in investing activities | (73) | (85) | |||
Financing activities | |||||
Net change in short-term debt | (1) | 298 | |||
Proceeds from long-term debt | 2 | 4 | |||
Repayment of long-term debt | (1) | (1) | |||
Deferred financing payments | (2) | ||||
Dividends paid to common stockholders | (14) | (15) | |||
Distributions to noncontrolling interests | (1) | ||||
Contributions from noncontrolling interests | 1 | 2 | |||
Other, net | (1) | (4) | |||
Net cash provided by (used in) financing activities | (16) | 283 | |||
Net increase (decrease) in cash, cash equivalents and restricted cash | (62) | 147 | |||
Cash, cash equivalents and restricted cash − beginning of period | 567 | 518 | |||
Effect of exchange rate changes on cash balances | (12) | (29) | |||
Cash, cash equivalents and restricted cash − end of period | $ 493 | $ 636 | |||
DANA INCORPORATED | |||||
Reconciliation of Net Cash Provided By (Used In) Operating Activities to | |||||
Free Cash Flow and Adjusted Free Cash Flow (Unaudited) | |||||
For the Three Months Ended March 31, 2021 and 2020 | |||||
Three Months Ended | |||||
(In millions) | March 31, | ||||
2021 | 2020 | ||||
Net cash provided by (used in) operating activities | $ 27 | $ (51) | |||
Purchase of property, plant and equipment | (53) | (63) | |||
Free cash flow | (26) | (114) | |||
Discretionary pension contributions | |||||
Adjusted free cash flow | $ (26) | $ (114) | |||
DANA INCORPORATED | ||||
Segment Sales and Segment EBITDA (Unaudited) | ||||
For the Three Months Ended March 31, 2021 and 2020 | ||||
Three Months Ended | ||||
(In millions) | March 31, | |||
2021 | 2020 | |||
Sales | ||||
Light Vehicle | $ 991 | $ 808 | ||
Commercial Vehicle | 352 | 333 | ||
Off-Highway | 632 | 532 | ||
Power Technologies | 288 | 253 | ||
Total Sales | $ 2,263 | $ 1,926 | ||
Segment EBITDA | ||||
Light Vehicle | $ 100 | $ 83 | ||
Commercial Vehicle | 14 | 21 | ||
Off-Highway | 80 | 72 | ||
Power Technologies | 41 | 30 | ||
Total Segment EBITDA | 235 | 206 | ||
Corporate expense and other items, net | (1) | (1) | ||
Adjusted EBITDA | $ 234 | $ 205 | ||
DANA INCORPORATED | ||||
Reconciliation of Segment and Adjusted EBITDA to Net Income (Unaudited) | ||||
For the Three Months Ended March 31, 2021 and 2020 | ||||
Three Months Ended | ||||
(In millions) | March 31, | |||
2021 | 2020 | |||
Segment EBITDA | $ 235 | $ 206 | ||
Corporate expense and other items, net | (1) | (1) | ||
Adjusted EBITDA | 234 | 205 | ||
Depreciation | (88) | (85) | ||
Amortization | (7) | (4) | ||
Non-service cost components of pension and OPEB costs | (2) | (2) | ||
Restructuring charges, net | (1) | (3) | ||
Stock compensation expense | (5) | (4) | ||
Strategic transaction expenses | (3) | (6) | ||
Loss on investment in Hyliion | (17) | |||
Loss on disposal group held for sale | (7) | |||
Impairment of goodwill | (51) | |||
Other items | 4 | (3) | ||
Earnings before interest and income taxes | 108 | 47 | ||
Interest income | 2 | 2 | ||
Interest expense | 34 | 29 | ||
Earnings before income taxes | 76 | 20 | ||
Income tax expense (benefit) | 22 | (16) | ||
Equity in earnings of affiliates | 14 | 2 | ||
Net income | $ 68 | $ 38 | ||
DANA INCORPORATED | |||||
Reconciliation of Net Income Attributable to the Parent Company to | |||||
Adjusted Net Income Attributable to the Parent Company and | |||||
Diluted Adjusted EPS (Unaudited) | |||||
For the Three Months Ended March 31, 2021 and 2020 | |||||
(In millions, except per share amounts) | |||||
Three Months Ended | |||||
March 31, | |||||
2021 | 2020 | ||||
Net income attributable to parent company | $ 71 | $ 58 | |||
Items impacting income before income taxes: | |||||
Amortization | 5 | 4 | |||
Restructuring charges, net | 1 | 3 | |||
Strategic transaction expenses | 3 | 6 | |||
Loss on investment in Hyliion | 17 | ||||
Loss on disposal group held for sale | 5 | ||||
Impairment of goodwill | 31 | ||||
Items impacting income taxes: | |||||
Net income tax expense on items above | (6) | (3) | |||
Tax (benefit) attributable to various discrete tax matters | 1 | (31) | |||
Adjusted net income attributable to the parent | $ 97 | $ 68 | |||
Diluted shares - as reported | 146.4 | 144.8 | |||
Adjusted diluted shares | 146.4 | 144.8 | |||
Diluted adjusted EPS | $ 0.66 | $ 0.47 | |||
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SOURCE Dana Incorporated
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