DANA INCORPORATED
Sales of
Net income attributable to Dana of
Diluted EPS of
Adjusted EBITDA of
Adjusted EBITDA margin of 9.1 percent, a 150 basis points improvement compared with last year
'Dana had strong sales of
'The business continues to strengthen due to our broad global customer base and cross-mobility market balance as we successfully execute numerous new-program launches and win new business.'
Third-quarter 2023 Financial Results
Sales for the third quarter of 2023 totaled
Adjusted EBITDA for the third quarter of 2023 was
Net income attributable to Dana was
Adjusted net income attributable to Dana was
Cash flow from operations in the third quarter of 2023 was
Dana Provides Update on Outlook
'
'Dana remains fundamentally strong due to the strength of our balance sheet and capital structure. If all the UAW strikes are resolved by the end of October, Dana expects sales and profit to be maintained at the midpoint of our previous guidance range. If no resolution is reached by year's end at all our
Updated 2023 Financial Targets1, 2
Sales of
Adjusted EBITDA of
Diluted adjusted EPS of
Operating cash flow of approximately,
Free cash flow use of
1Net income and diluted EPS guidance are not provided, as discussed below in Non-GAAP Financial Information.
Dana to Host Conference Call at
Dana will discuss its third-quarter results in a conference call at
Conference ID: 9943139Participant Toll-Free Dial-In Number: 1 (888) 440-5873Participant Toll Dial-In Number: 1 (646) 960-0319
Audio streaming and slides will be available online via a link provided on the Dana investor website: www.dana.com/investors.
A webcast replay can be accessed via Dana's investor website following the call.
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. We believe free cash flow is useful to investors in evaluating the operational cash flow of the company inclusive of the spending required to maintain the operations. Free cash flow is 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 may not be comparable to similarly titled measures reported by other companies.
The accompanying financial information provides reconciliations of adjusted EBITDA, diluted adjusted EPS and free cash flow to the most directly comparable financial measures calculated and presented in accordance with GAAP. We have not provided a reconciliation of our adjusted EBITDA and diluted adjusted EPS outlook to the most comparable GAAP measures of net income (loss) and diluted EPS. Providing net income (loss) 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 (loss) and diluted EPS, including restructuring actions, asset impairments and certain income tax adjustments. The accompanying reconciliations of these non-GAAP measures with the most comparable GAAP measures for the historical periods presented are indicative of the reconciliations that will be prepared upon completion of the periods covered by the non-GAAP guidance.
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
About
Dana is a leader in the design and manufacture of highly efficient propulsion and energy-management solutions that power vehicles and machines in all mobility markets across the globe. The company is shaping sustainable progress through its conventional and clean-energy solutions that support nearly every vehicle manufacturer with drive and motion systems; electrodynamic technologies, including software and controls; and thermal, sealing, and digital solutions.
Based in
Consolidated Statement of Operations (Unaudited)
For the Three Months Ended
Three Months Ended
(In millions, except per share amounts)
2023
2022
Net sales
Costs and expenses
Cost of sales
2,433
2,332
Selling, general and administrative expenses
126
114
Amortization of intangibles
3
3
Restructuring charges, net
17
(1)
Impairment of goodwill
(191)
Other income (expense), net
1
3
Earnings (loss) before interest and income taxes
91
(101)
Interest income
5
2
Interest expense
41
32
Earnings (loss) before income taxes
55
(131)
Income tax expense
33
31
Equity in earnings (loss) of affiliates
3
(1)
Net income (loss)
25
(163)
Less: Noncontrolling interests net income
8
4
Less: Redeemable noncontrolling interests net loss
(2)
(79)
Net income (loss) attributable to the parent company
Net income (loss) per share available to common stockholders
Basic
Diluted
Weighted-average shares outstanding - Basic
144.3
143.4
Weighted-average shares outstanding - Diluted
144.7
143.4
Consolidated Statement of Operations (Unaudited)
For the Nine Months Ended
Nine Months Ended
(In millions, except per share amounts)
2023
2022
Net sales
Costs and expenses
Cost of sales
7,325
7,018
Selling, general and administrative expenses
410
374
Amortization of intangibles
10
10
Restructuring charges, net
21
(1)
Impairment of goodwill
(191)
Other income (expense), net
10
15
Earnings before interest and income taxes
305
24
Loss on extinguishment of debt
(1)
Interest income
14
6
Interest expense
114
95
Earnings (loss) before income taxes
204
(65)
Income tax expense
118
67
Equity in earnings (loss) of affiliates
6
(1)
Net income (loss)
92
(133)
Less: Noncontrolling interests net income
17
11
Less: Redeemable noncontrolling interests net loss
(2)
(81)
Net income (loss) attributable to the parent company
Net income (loss) per share available to common stockholders
Basic
Diluted
Weighted-average shares outstanding - Basic
144.2
143.6
Weighted-average shares outstanding - Diluted
144.5
143.6
Consolidated Statement of Comprehensive Income (Unaudited)
For the Three Months Ended
Three Months Ended
(In millions)
2023
2022
Net income (loss)
Other comprehensive income (loss), net of tax:
Currency translation adjustments
(24)
(82)
Hedging gains and losses
(21)
1
Defined benefit plans
(1)
1
Other comprehensive loss
(46)
(80)
Total comprehensive loss
(21)
(243)
Less: Comprehensive income attributable to noncontrolling interests
(7)
(1)
Less: Comprehensive loss attributable to redeemable noncontrolling interests
4
89
Comprehensive loss attributable to the parent company
Consolidated Statement of Comprehensive Income (Unaudited)
For the Nine Months Ended
Nine Months Ended
(In millions)
2023
2022
Net income (loss)
Other comprehensive income (loss), net of tax:
Currency translation adjustments
(6)
(134)
Hedging gains and losses
(3)
(2)
Defined benefit plans
5
Other comprehensive income (loss)
(9)
(131)
Total comprehensive income (loss)
83
(264)
Less: Comprehensive income attributable to noncontrolling interests
(16)
(6)
Less: Comprehensive loss attributable to redeemable noncontrolling interests
4
97
Comprehensive income (loss) attributable to the parent company
Consolidated Balance Sheet (Unaudited)
As of
(In millions, except share and per share amounts)
2023
2022
Assets
Current assets
Cash and cash equivalents
Accounts receivable
Trade, less allowance for doubtful accounts of
1,562
1,374
Other
292
202
Inventories
1,713
1,609
Other current assets
232
219
Total current assets
4,220
3,829
256
259
Intangibles
184
201
Deferred tax assets
437
397
Other noncurrent assets
128
123
Investments in affiliates
135
136
Operating lease assets
327
311
Property, plant and equipment, net
2,250
2,193
Total assets
Liabilities, redeemable noncontrolling interests and equity
Current liabilities
Short-term debt
Current portion of long-term debt
31
8
Accounts payable
1,883
1,838
Accrued payroll and employee benefits
273
214
Taxes on income
85
54
Current portion of operating lease liabilities
38
36
Other accrued liabilities
323
277
Total current liabilities
2,670
2,479
Long-term debt, less debt issuance costs of
2,563
2,348
Noncurrent operating lease liabilities
287
277
Pension and postretirement obligations
297
298
Other noncurrent liabilities
263
249
Total liabilities
6,080
5,651
Commitments and contingencies
Redeemable noncontrolling interests
210
195
Parent company stockholders' equity
Preferred stock, 50,000,000 shares authorized,
no shares outstanding
-
-
Common stock, 450,000,000 shares authorized,
144,337,917 and 143,366,482 shares outstanding
2
2
Additional paid-in capital
2,249
2,229
Retained earnings
353
321
(8)
-
Accumulated other comprehensive loss
(1,007)
(1,001)
Total parent company stockholders' equity
1,589
1,551
Noncontrolling interests
58
52
Total equity
1,647
1,603
Total liabilities, redeemable noncontrolling interests and equity
Consolidated Statement of Cash Flows (Unaudited)
For the Three Months Ended
Three Months Ended
(In millions)
2023
2022
Operating activities
Net income (loss)
Depreciation
101
88
Amortization
6
6
Amortization of deferred financing charges
1
1
Earnings of affiliates, net of dividends received
(1)
Stock compensation expense
5
5
Deferred income taxes
(16)
(14)
Pension expense, net
2
Impairment of goodwill
191
Change in working capital
3
63
Other, net
(14)
(6)
Net cash provided by operating activities
112
171
Investing activities
Purchases of property, plant and equipment
(117)
(94)
Purchases of marketable securities
(2)
Proceeds from sales of marketable securities
8
Settlements of undesignated derivatives
(6)
1
Other, net
(15)
5
Net cash used in investing activities
(138)
(82)
Financing activities
Net change in short-term debt
2
(2)
Repayment of long-term debt
(3)
(14)
Dividends paid to common stockholders
(14)
(14)
Distributions to noncontrolling interests
(7)
(6)
Contributions from redeemable noncontrolling interests
1
23
Other, net
1
(1)
Net cash used in financing activities
(20)
(14)
Net increase (decrease) in cash, cash equivalents and restricted cash
(46)
75
Cash, cash equivalents and restricted cash -- beginning of period
503
340
Effect of exchange rate changes on cash balances
(17)
(25)
Cash, cash equivalents and restricted cash -- end of period
Consolidated Statement of Cash Flows (Unaudited)
For the Nine Months Ended
Nine Months Ended
(In millions)
2023
2022
Operating activities
Net income (loss)
Depreciation
287
270
Amortization
17
17
Amortization of deferred financing charges
4
4
Write-off of deferred financing costs
1
Earnings of affiliates, net of dividends received
(4)
29
Stock compensation expense
19
13
Deferred income taxes
(46)
(56)
Pension expense, net
4
Impairment of goodwill
191
Change in working capital
(169)
(21)
Other, net
(7)
(7)
Net cash provided by operating activities
198
307
Investing activities
Purchases of property, plant and equipment
(359)
(300)
Acquisition of business, net of cash acquired
(1)
Purchases of marketable securities
(15)
Proceeds from sales of marketable securities
18
Settlements of undesignated derivatives
(10)
(6)
Other, net
(14)
7
Net cash used in investing activities
(383)
(297)
Financing activities
Net change in short-term debt
(15)
212
Proceeds from long-term debt
458
2
Repayment of long-term debt
(207)
(19)
Deferred financing payments
(9)
Dividends paid to common stockholders
(43)
(43)
Repurchases of common stock
(25)
Distributions to noncontrolling interests
(10)
(8)
Contributions from redeemable noncontrolling interests
18
30
Payments to acquire noncontrolling interests
(4)
Other, net
(3)
(7)
Net cash provided by financing activities
189
138
Net increase in cash, cash equivalents and restricted cash
4
148
Cash, cash equivalents and restricted cash -- beginning of period
442
287
Effect of exchange rate changes on cash balances
(6)
(45)
Cash, cash equivalents and restricted cash -- end of period
Reconciliation of Net Cash Provided By Operating Activities to
Free Cash Flow (Unaudited)
Three Months Ended
(In millions)
2023
2022
Net cash provided by operating activities
Purchases of property, plant and equipment
(117)
(94)
Free cash flow
Nine Months Ended
(In millions)
2023
2022
Net cash provided by operating activities
Purchases of property, plant and equipment
(359)
(300)
Free cash flow
Segment Sales and Segment EBITDA (Unaudited)
For the Three Months Ended
Three Months Ended
(In millions)
2023
2022
Sales
Light Vehicle
535
505
Off-Highway
739
694
Power Technologies
311
289
Total Sales
Segment EBITDA
Light Vehicle
29
18
Off-Highway
110
91
Power Technologies
28
21
Total Segment EBITDA
242
190
Corporate expense and other items, net
2
Adjusted EBITDA
Segment Sales and Segment EBITDA (Unaudited)
For the Nine Months Ended
Nine Months Ended
(In millions)
2023
2022
Sales
Light Vehicle
1,583
1,475
Off-Highway
2,423
2,206
Power Technologies
943
860
Total Sales
Segment EBITDA
Light Vehicle
74
38
Off-Highway
359
291
Power Technologies
70
71
Total Segment EBITDA
693
524
Corporate expense and other items, net
(4)
Adjusted EBITDA
Reconciliation of Segment and Adjusted EBITDA to Net Income (Loss) (Unaudited)
For the Three Months Ended
Three Months Ended
(In millions)
2023
2022
Segment EBITDA
Corporate expense and other items, net
2
Adjusted EBITDA
242
192
Depreciation
(101)
(88)
Amortization
(6)
(6)
Non-service cost components of pension and OPEB costs
(4)
Restructuring charges, net
(17)
1
Stock compensation expense
(5)
(5)
Strategic transaction expenses
(2)
(1)
Distressed supplier costs
(14)
Impairment of goodwill
(191)
Other items
(2)
(3)
Earnings (loss) before interest and income taxes
91
(101)
Interest income
5
2
Interest expense
41
32
Earnings (loss) before income taxes
55
(131)
Income tax expense
33
31
Equity in earnings (loss) of affiliates
3
(1)
Net income (loss)
Reconciliation of Segment and Adjusted EBITDA to Net Income (Loss) (Unaudited)
For the Nine Months Ended
Nine Months Ended
(In millions)
2023
2022
Segment EBITDA
Corporate expense and other items, net
(4)
Adjusted EBITDA
689
524
Depreciation
(287)
(270)
Amortization
(17)
(17)
Non-service cost components of pension and OPEB costs
(10)
(3)
Restructuring charges, net
(21)
1
Stock compensation expense
(19)
(13)
Strategic transaction expenses
(4)
(6)
Distressed supplier costs
(26)
Impairment of goodwill
(191)
Other items
(1)
Earnings before interest and income taxes
305
24
Loss on extinguishment of debt
(1)
Interest income
14
6
Interest expense
114
95
Earnings (loss) before income taxes
204
(65)
Income tax expense
118
67
Equity in earnings (loss) of affiliates
6
(1)
Net income (loss)
Reconciliation of Net Income (Loss) Attributable to the Parent Company to
Adjusted Net Income Attributable to the Parent Company and
Diluted Adjusted EPS (Unaudited)
For the Three Months Ended
(In millions, except per share amounts)
Three Months Ended
2023
2022
Net income (loss) attributable to the parent company
Items impacting income (loss) before income taxes:
Amortization
5
5
Restructuring charges, net
17
(1)
Strategic transaction expenses
2
3
Distressed supplier costs
14
Impairment of goodwill
118
Other items
2
Items impacting income taxes:
Net income tax expense on items above
(16)
(5)
Income tax expense attributable to various discrete tax matters
2
Adjusted net income attributable to the parent company
Diluted shares - as reported
144.7
143.4
Adjusted diluted shares
144.7
143.8
Diluted adjusted EPS
Reconciliation of Net Income (Loss) Attributable to the Parent Company to
Adjusted Net Income Attributable to the Parent Company and
Diluted Adjusted EPS (Unaudited)
For the Nine Months Ended
(In millions, except per share amounts)
Nine Months Ended
2023
2022
Net income (loss) attributable to the parent company
Items impacting income (loss) before income taxes:
Amortization
15
15
Restructuring charges, net
21
(1)
Strategic transaction expenses
4
8
Distressed supplier costs
26
Impairment of goodwill
118
Other items
2
Items impacting income taxes:
Net income tax expense on items above
(26)
(10)
Income tax expense attributable to various discrete tax matters
14
2
Adjusted net income attributable to the parent company
Diluted shares - as reported
144.5
143.6
Adjusted diluted shares
144.5
144.4
Diluted adjusted EPS
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