Dana Holding Corporation Reports Strong Results for Full-Year 2013

MAUMEE, Ohio, Feb. 20, 2014 /PRNewswire/ -- Dana Holding Corporation (NYSE: DAN) today announced its fourth-quarter and full-year results for 2013.

Full-Year 2013 Financial Results
Sales for the year totaled $6.8 billion, compared with $7.2 billion for 2012. Currency, scheduled light-vehicle program roll-offs, and a divestiture lowered sales by $377 million.  Dana benefited from stronger global light-vehicle production demand in 2013 which increased sales by about $80 million.  This benefit was offset by softer demand principally in the North America heavy-truck market and global off-highway markets which lowered sales by about $220 million compared with a year ago. 

Dana posted net income of $244 million for 2013, compared with $300 million in the previous year that included a nonrecurring tax benefit of $54 million for the release of tax valuation allowances in certain foreign jurisdictions.  Adjusting for this nonrecurring benefit, Dana's 2013 net income was slightly lower than a year ago.  Lower restructuring charges, higher earnings from equity affiliates, and other income was offset by higher interest expense attributable to the company's successful 2013 capital market activities and a higher effective tax rate.

For financial reporting purposes, net income attributable to common stockholders includes adjustments related to preferred stock dividends and redemptions.  During the third quarter of 2013, Dana redeemed all of its outstanding Series A preferred stock and the difference between the amount paid and the historic carrying value of this security was $232 million, which was included as an adjustment to net income attributable to common stockholders.

Diluted adjusted earnings per share, which excludes restructuring-related charges, amortization expense, and other nonrecurring items, totaled $1.77 for the full-year 2013. This includes the benefit from a reduced diluted share count as a result of the company's share repurchase and redemption activities during the course of 2013. Diluted adjusted earnings per share for 2012 totaled $1.75.

Dana reported adjusted EBITDA of $745 million for the full-year 2013, compared with $781 a year ago.  The company's continued focus and execution of cost-reduction and recovery actions in light of unfavorable currency movements and lower demand in a number of served end-markets increased adjusted EBITDA margin to 11.0 percent in 2013, compared with 10.8 percent in 2012, marking the fifth consecutive year of margin expansion. 

Dana generated record free cash flow of $368 million for the full-year 2013.  Strong operating earnings and working capital execution offset increased capital investment and higher cash taxes. Compared with a year ago, and adjusting for a voluntary cash contribution to the company's U.S. pension plans of $150 million in 2012, free cash flow was higher by $43 million.

The company ended the year with cash and marketable securities totaling approximately $1.37 billion.  During 2013, Dana increased its existing share repurchase program from $250 million to $1 billion and accessed the credit markets on favorable terms to raise additional unsecured debt of $750 million.  With the second-half 2013 redemption of all outstanding Series A convertible preferred stock, completion of a $200 million accelerated common share-repurchase program, and other open-market common share repurchases, as of the end of 2013, Dana has returned $829 million to shareholders under its share-repurchase program.

Fourth-Quarter 2013 Financial Results
Sales for the fourth-quarter of 2013 totaled $1.62 billion, compared with $1.61 billion for the same period a year ago.  While currency movements lowered sales by $45 million when compared with a year ago, stronger demand across light- and commercial-vehicle end markets and recovery actions increased sales by about $60 million. 

Net income for the fourth quarter of 2013 was $42 million, compared with $88 million in 2012, which included the aforementioned $54 million benefit from the release of certain tax valuation allowances.  Adjusted diluted earnings per share in the fourth quarter of 2013 rose to $0.49, compared with $0.38 for the same period a year ago, reflecting both improved adjusted net income as defined and a reduced diluted share count as a result of the company's share redemption and repurchase activities during the course of 2013.

Adjusted EBITDA for the fourth quarter of 2013 was $174 million, $20 million higher than the previous year.  Adjusted EBITDA margin of 10.7 percent in the fourth quarter of 2013 increased 110 basis points when compared with the same period a year ago, reflecting the favorable impact of higher volume and net performance from cost reductions and recovery actions.  Free cash flow for the fourth quarter totaled $198 million, $31 million higher than 2012.  Improved earnings, positive working capital performance, and lower pension and restructuring cash outlays more than offset increased capital spending in support of future business growth.

"Dana performed very well in 2013 in nearly every region of the world," said company President and Chief Executive Officer Roger J. Wood.  "Our adjusted EBITDA margin performance in 2013 set another record and provided the fifth straight year of margin expansion.  Dana also posted record free cash flow in the year and, coupled with strong capital market activities, we have returned $829 million to our shareholders in the form of share redemptions and repurchases since the inception of our share repurchase program in late 2012.

"As we move into 2014 and beyond, we continue to remain focused on launching our new technologies, improving the operating and financial performance of Dana, and capitalizing on our long-term growth momentum as we further innovate and differentiate our products to meet the needs of our customers."

2014 Financial Targets
For 2014, the company expects primarily stable end-market demand across most regions, with continued strength in full-frame light trucks and improving North American commercial-vehicle demand.  Worldwide mining and construction-equipment markets are expected to remain sluggish during the course of this year, while currency and economic challenges in emerging markets such as South America and India are expected to continue.

Financial targets for 2014 include:

• Sales of approximately $6.8 to $6.9 billion;
• Adjusted EBITDA of approximately $760 to $770 million;
• Adjusted EBITDA as a percent of sales of approximately 11.2 percent;
• Diluted adjusted EPS of approximately $1.82 to $1.86 (excluding the impact of share repurchases after Dec. 31, 2013);
• Capital spending of approximately $210 to $230 million; and
• Free cash flow of $275 to $295 million.

Recognition of Dana Innovation and Technology
Dana products continue to power award-winning vehicles, including the 2014 Motor Trend Car and Truck of the Year, North American Car and Truck of the Year, Green Car of the Year, Commercial Trucks of the Year, and Tractor of the Year, as well as six of this year's Ward's 10 Best Engines.

Dana technology is featured on the Motor Trend Car of the Year, the Cadillac CTS.  On the HFV6 3.0L and HFV6 3.6L LY7 engines, the technology includes Dana's Victor Reinz^® cylinder-head gaskets, exhaust and secondary gaskets, intake manifold gasket, heat shields, and valve seals, while the Gen IV 6.0L - LSA engine includes Dana's heat shields and exhaust manifold gaskets.  These technologies reduce oil consumption, improve noise, vibration, and harshness, and help protect engine components from extreme temperatures, while ensuring the highest durability.

This year's Motor Trend Truck of the Year, the 2014 Ram 1500 EcoDiesel, features a Spicer^® rear driveshaft, Victor Reinz exhaust gaskets, and Long^® active warm-up technology, which significantly lowers fuel consumption and emissions by enabling engines to quickly reach optimum operating temperatures.

The Chevrolet Corvette Stingray, the 2014 North American Car of the Year, includes a variety of Dana technologies, such as Victor Reinz exhaust gaskets, secondary gaskets, and heat shields that suppress noise and protect from extreme heat with improved durability.  Additionally, the vehicle includes Dana's Long brand transmission oil cooler, differential oil cooler, and engine oil cooler, which help to effectively manage heat to ensure optimum operating conditions and long-term durability.

Dana also is featured on the 2014 North American Truck of the Year, the Chevrolet Silverado.  The newly redesigned truck includes Dana's Victor Reinz heat shields, which provide a three-layer construction to protect against extreme temperatures and suppress noise.  On the heavy-duty versions of the Silverado, Dana's Long transmission oil cooler helps to manage heat and ensures long-term durability for the pickup.

In addition, Dana's Victor Reinz cylinder-head cover module is featured on the Green Car Journal Green Car of the Year, the 2014 Honda Accord.

Spicer axles and driveshafts are also available in OEM data books for the 2014 American Truck Dealer's Commercial Trucks of the Year, the medium-duty International TerraStar 4X4 and the heavy-duty International ProStar with Cummins ISX15.

Finally, a Spicer front drive axle is integrated into the CLAAS AXION 800, named the 2014 Tractor of the Year and 2014 Machine of the Year at Automechanica.

Dana also supplies many technologies to the 2014 Ward's 10 Best Engines, including:

• Audi 3.0L TFSI Supercharged DOHC V-6 – Features Victor Reinz cylinder-head gasket and secondary gaskets that deliver improved reliability and durability while reducing oil consumption and bore distortion.
• Ram 3.0L Turbodiesel DOHC V-6 – Equipped with Victor Reinz exhaust gasket and Long active warm up that reduce emissions and fuel consumption by enabling engines to quickly reach optimum operating temperatures.
• Fiat 83-kW Electric Motor – Includes Dana's Long battery chiller that helps minimize temperature variation and improve battery operation. 
• Chevy 6.2L OHV V-8 – Uses Long engine oil cooler, Victor Reinz secondary gasket and exhaust gasket, and heat shields to lower and control engine oil operating temperature and protect the engine from extreme heat.
• Honda 3.5L SOHC V-6 – Features Victor Reinz cylinder-head cover modules providing optimal design performance and improved durability.
• Volkswagen 1.8L Turbocharged DOHC I-4 – Utilizes Long engine oil coolers which lower and control engine oil operating temperature.

Dana to Host Conference Call at 10 a.m. Today
Dana will discuss its full-year and fourth-quarter results in a conference call at 10 a.m. EST today.  Participants may listen to the conference call via audio streaming online or telephone.  Slide viewing is available via Dana's investor website: www.dana.com/investors.  United States and Canadian locations should dial 1-888-311-4590 and international locations should call 1-706-758-0054, and enter 42803164.  Please ask for the "Dana Holding Corporate Financial Webcast and Conference Call."  Phone registration will be available starting at 9:30 a.m. 

An audio recording of the webcast will be available after 5 p.m. today; dial 1-855-859-2056 (U.S. or Canada) or 1-404-537-3406 (international) and enter 42803164.  A webcast replay will be available after 5 p.m. today, and may be accessed via Dana's investor website.

Non-GAAP Financial Information
This release refers to adjusted EBITDA, a non-GAAP financial measure, which we have defined as earnings from continuing and discontinued operations 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 primary driver of cash flows from operations and a measure of our ability to maintain and continue to invest in our operations and provide shareholder returns. Adjusted EBITDA should not be considered a substitute for income (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.

Diluted adjusted EPS is a non-GAAP financial measure, which we have defined as adjusted net income divided by adjusted diluted shares.  We define adjusted net income as net income (loss) attributable to the parent company, excluding any nonrecurring income tax items, restructuring and impairment expense, amortization expense and other nonrecurring items (as used in adjusted EBITDA), net of any associated income tax effects.  We define adjusted diluted shares as diluted shares as determined in accordance with GAAP based on adjusted net income.  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 under GAAP.

Free cash flow is a non-GAAP financial measure, which we have defined as cash provided by (used in) operating activities, less purchases of property, plant and equipment.  We believe this measure 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 neither intended to represent nor be an alternative to the measure of net cash provided by (used in) operating activities reported under 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.

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, where 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," 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 global leader in the supply of highly engineered driveline, sealing, and thermal-management technologies that improve the efficiency and performance of vehicles with both conventional and alternative-energy powertrains.  Serving three primary markets – passenger vehicle, commercial truck, and off-highway equipment – Dana provides the world's original-equipment manufacturers and the aftermarket with local product and service support through a network of nearly 100 engineering, manufacturing, and distribution facilities.  Founded in 1904 and based in Maumee, Ohio, the company employs 23,000 people in 26 countries on six continents.  In 2013, Dana generated sales of $6.8 billion.  For more information, please visit dana.com.

SOURCE Dana Holding Corporation

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