Dana Holding Corporation Reports 2008 Results
(Logo: http://www.newscom.com/cgi-bin/prnh/19990903/DANA )
Sales for the full-year 2008 were
Including a one-time gain of
At year end, Dana had cash balances of
“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
Three-Month Results
Sales for the fourth quarter of 2008 were
Fourth-quarter EBITDA was a negative
Free cash flow was a negative
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
Dana will discuss its full-year and fourth-quarter results in a conference call at
Non-GAAP Measures
In connection with Dana’s emergence from bankruptcy on
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
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.
SOURCE Dana Holding Corporation