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Dana Incorporated Reports 2022 First-quarter Financial Results

DAN

Key Highlights

  • Sales of $2.48 billion, an increase of $217 million
  • Net income attributable to Dana of $17 million
  • Diluted EPS of $0.12
  • Adjusted net income attributable to Dana of $23 million
  • Adjusted EBITDA of $170 million
  • Diluted adjusted EPS of $0.16
  • Repurchased approximately 1.5 million shares of common stock during the first quarter of 2022

MAUMEE, Ohio, April 27, 2022 /PRNewswire/ -- Dana Incorporated (NYSE: DAN) today announced financial results for the first quarter of 2022.

Dana Incorporated logo. (PRNewsFoto/Dana Incorporated)

"Dana saw continued sales growth in the first quarter despite record inflation, rising commodity costs, and ongoing global supply-chain disruptions," said James Kamsickas, Dana chairman and CEO. "As the entire mobility industry navigates soaring costs and geopolitical unrest that is greatly impacting the energy and transportation sectors, Dana continues to actively manage through these cost pressures as well as navigate through erratic and short notice customer demand changes. We continue to innovate and launch new products and deliver on our $400 million of new business sales backlog that is coming online this year."

First-quarter 2022 Financial Results

Sales for the first quarter of 2022 totaled $2.48 billion, compared with $2.26 billion in the same period of 2021, representing a $217 million improvement driven by strong customer demand in our heavy-vehicle markets and the recovery of commodity costs and inflation.

Adjusted EBITDA for the first quarter of 2022 was $170 million, compared with $234 million for the same period in 2021. Profit conversion on higher sales in the first quarter of 2022 was tempered by increased input costs and operational inefficiencies, primarily attributable to continued global supply-chain disruptions.

Adjusted net income attributable to Dana and diluted adjusted earnings per share were $23 million and $0.16 for the first quarter of 2022, compared with $97 million and $0.66 in the prior year.

Operating cash flow in the first quarter of 2022 was a use of $121 million, compared with operating cash flow of $27 million in the same period of 2021.

Free cash flow was a use of $237 million, compared with a use of $26 million in the first quarter of 2021. The higher free cash flow use in this year's first quarter was driven by lower earnings, higher working capital requirements, and elevated capital investment in support of awarded new business.

"External factors continue to pressure our margins and free cash flow as rapid inflation of energy, services, and labor are further driving up costs," said Timothy Kraus, Dana senior vice president and chief financial officer. "While we see some improvement late this year, we anticipate these factors will remain a profit headwind. We have adjusted our financial targets to better reflect the conditions across the mobility markets and continue to aggressively work to mitigate the impact of these challenges and position ourselves to capitalize on strong end-market demand and low vehicle inventories once the global environment stabilizes."

2022 Revised Financial Targets1
  • Sales of $9.850 to $10.350 billion;
  • Adjusted EBITDA of $770 to $870 million, an implied adjusted EBITDA margin of approximately
    8.1 percent at the midpoint of the range;
  • Diluted adjusted EPS of $1.05 to $1.55;
  • Operating cash flow of approximately 5.9 to 6.5 percent of sales; and
  • Free cash flow of approximately 1.9 to 2.3 percent of sales.

1Net 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 27

Dana will discuss its first-quarter results in a conference call at 9 a.m. EDT on Wednesday, April 27. 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. 2565879 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 27 by dialing 1-855-859-2056 (U.S. or Canada) or 1-404-537-3406 (international) and entering conference I.D. 2565879. 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

This release refers to adjusted EBITDA, a non-GAAP financial measure which we have defined as net income 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 income before income taxes, net income 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 charges, amortization expense, and other adjustments not related to our core operations (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 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 voluntary 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 under 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 preliminary and projected adjusted EBITDA and diluted adjusted EPS 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 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 Maumee, Ohio, USA, the company reported sales of $8.9 billion in 2021 with 40,000 people in 31 countries across six continents. Founded in 1904, Dana was named one of "America's Most Responsible Companies 2022" by Newsweek for its emphasis on sustainability and social responsibility. The company is driven by a high-performance culture that focuses on valuing others, inspiring innovation, growing responsibly, and winning together, earning it global recognition as a top employer. Learn more at dana.com.

DANA INCORPORATED

Consolidated Statement of Operations (Unaudited)

For the Three Months Ended March 31, 2022 and 2021





Three Months Ended

(In millions, except per share amounts)


March 31,




2022


2021

Net sales



$ 2,480


$ 2,263

Costs and expenses





Cost of sales


2,283


2,012

Selling, general and administrative expenses


130


119

Amortization of intangibles


4


4

Restructuring charges, net


(1)


1

Other income (expense), net


2


(19)

Earnings before interest and income taxes


66


108

Interest income


2


2

Interest expense


31


34

Earnings before income taxes


37


76

Income tax expense


18


22

Equity in earnings of affiliates


1


14

Net income


20


68

Less: Noncontrolling interests net income


4


1

Less: Redeemable noncontrolling interests net loss


(1)


(4)

Net income attributable to the parent company


$ 17


$ 71







Net income per share available to common stockholders





Basic



$ 0.12


$ 0.49

Diluted



$ 0.12


$ 0.48







Weighted-average shares outstanding - Basic


144.2


144.9

Weighted-average shares outstanding - Diluted


145.3


146.4

DANA INCORPORATED

Consolidated Statement of Comprehensive Income (Unaudited)

For the Three Months Ended March 31, 2022 and 2021














Three Months Ended

(In millions)


March 31,






2022


2021

Net income


$ 20


$ 68

Other comprehensive income (loss), net of tax:






Currency translation adjustments


39


(5)


Hedging gains and losses


(4)


(17)


Defined benefit plans


1


3


Other comprehensive income (loss)


36


(19)

Total comprehensive income


56


49


Less: Comprehensive (income) loss attributable to noncontrolling interests


(4)


1


Less: Comprehensive loss attributable to redeemable noncontrolling interests


1


3

Comprehensive income attributable to the parent company


$ 53


$ 53

DANA INCORPORATED

Consolidated Balance Sheet (Unaudited)

As of March 31, 2022 and December 31, 2021








(In millions, except share and per share amounts)


March 31,


December 31,



2022


2021

Assets





Current assets





Cash and cash equivalents


$ 259


$ 268

Marketable securities


19


17

Accounts receivable






Trade, less allowance for doubtful accounts of $7 in 2022 and $7 in 2021


1,625


1,321


Other


250


220

Inventories


1,631


1,564

Other current assets


210


196



Total current assets


3,994


3,586

Goodwill


479


482

Intangibles


225


233

Deferred tax assets


603


580

Other noncurrent assets


128


131

Investments in affiliates


175


174

Operating lease assets


244


247

Property, plant and equipment, net


2,205


2,199



Total assets


$ 8,053


$ 7,632






Liabilities and equity





Current liabilities





Short-term debt


$ 301


$ 23

Current portion of long-term debt


8


8

Accounts payable


1,717


1,571

Accrued payroll and employee benefits


207


184

Taxes on income


55


41

Current portion of operating lease liabilities


39


43

Other accrued liabilities


293


304



Total current liabilities


2,620


2,174

Long-term debt, less debt issuance costs of $25 in 2022 and $26 in 2021


2,376


2,386

Noncurrent operating lease liabilities


211


209

Pension and postretirement obligations


390


398

Other noncurrent liabilities


269


292



Total liabilities


5,866


5,459

Commitments and contingencies





Redeemable noncontrolling interests


200


198

Parent company stockholders' equity






Preferred stock, 50,000,000 shares authorized, $0.01 par value,






no shares outstanding


-


-


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






143,334,271 and 144,238,660 shares outstanding


2


2


Additional paid-in capital


2,431


2,427


Retained earnings


664


662


Treasury stock, at cost (13,466,902 and 11,661,591 shares)


(216)


(184)


Accumulated other comprehensive loss


(949)


(985)



Total parent company stockholders' equity


1,932


1,922

Noncontrolling interests


55


53



Total equity


1,987


1,975



Total liabilities, redeemable noncontrolling interests and equity


$ 8,053


$ 7,632

DANA INCORPORATED

Consolidated Statement of Cash Flows (Unaudited)

For the Three Months Ended March 31, 2022 and 2021










Three Months Ended

(In millions)


March 31,




2022


2021

Operating activities





Net income


$ 20


$ 68

Depreciation


91


88

Amortization


6


7

Amortization of deferred financing charges


1


2

Earnings of affiliates, net of dividends received


(1)


(14)

Stock compensation expense


4


5

Deferred income taxes


(25)


(6)

Pension expense, net


(1)



Change in working capital


(211)


(133)

Other, net


(5)


10

Net cash provided by (used in) operating activities


(121)


27







Investing activities





Purchases of property, plant and equipment


(116)


(53)

Acquisition of businesses, net of cash acquired




(17)

Purchases of marketable securities


(5)


(11)

Proceeds from sales and maturities of marketable securities


2


6

Other, net


2


2

Net cash used in investing activities


(117)


(73)







Financing activities





Net change in short-term debt


278


(1)

Proceeds from long-term debt


2


2

Repayment of long-term debt


(3)


(1)

Deferred financing payments




(2)

Dividends paid to common stockholders


(14)


(14)

Distributions to noncontrolling interests


(1)



Contributions from redeemable noncontrolling interests


2


1

Payments to acquire noncontrolling interests


(3)



Repurchases of common stock


(25)



Other, net


(7)


(1)

Net cash provided by (used in) financing activities


229


(16)







Net decrease in cash, cash equivalents and restricted cash


(9)


(62)

Cash, cash equivalents and restricted cash − beginning of period


287


567

Effect of exchange rate changes on cash balances


2


(12)

Cash, cash equivalents and restricted cash − end of period


$ 280


$ 493

DANA INCORPORATED

Reconciliation of Net Cash Provided By (Used In) Operating Activities to

Free Cash Flow and Adjusted Free Cash Flow (Unaudited)









Three Months Ended

(In millions)


March 31,



2022


2021

Net cash provided by (used in) operating activities


$ (121)


$ 27

Purchase of property, plant and equipment


(116)


(53)

Free cash flow


(237)


(26)

Discretionary pension contributions






Adjusted free cash flow


$ (237)


$ (26)

DANA INCORPORATED

Segment Sales and Segment EBITDA (Unaudited)

For the Three Months Ended March 31, 2022 and 2021








Three Months Ended

(In millions)


March 31,



2022


2021

Sales





Light Vehicle


$ 985


$ 991

Commercial Vehicle


463


349

Off-Highway


744


635

Power Technologies


288


288

Total Sales


$ 2,480


$ 2,263






Segment EBITDA





Light Vehicle


$ 31


$ 100

Commercial Vehicle


10


15

Off-Highway


100


79

Power Technologies


29


41

Total Segment EBITDA


170


235

Corporate expense and other items, net




(1)

Adjusted EBITDA


$ 170


$ 234

DANA INCORPORATED

Reconciliation of Segment and Adjusted EBITDA to Net Income (Unaudited)

For the Three Months Ended March 31, 2022 and 2021








Three Months Ended

(In millions)


March 31,



2022


2021

Segment EBITDA


$ 170


$ 235

Corporate expense and other items, net




(1)

Adjusted EBITDA


170


234

Depreciation


(91)


(88)

Amortization


(6)


(7)

Non-service cost components of pension and OPEB costs




(2)

Restructuring charges, net


1


(1)

Stock compensation expense


(4)


(5)

Strategic transaction expenses


(4)


(3)

Loss on investment in Hyliion




(17)

Loss on disposal group held for sale




(7)

Other items




4

Earnings before interest and income taxes


66


108

Interest income


2


2

Interest expense


31


34

Earnings before income taxes


37


76

Income tax expense


18


22

Equity in earnings of affiliates


1


14

Net income


$ 20


$ 68

DANA INCORPORATED

Reconciliation of Net Income (Loss) Attributable to the Parent Company to

Adjusted Net Income (Loss) Attributable to the Parent Company and

Diluted Adjusted EPS (Unaudited)

For the Three Months Ended March 31, 2022 and 2021


(In millions, except per share amounts)




Three Months Ended




March 31,




2022


2021

Net income attributable to parent company


$ 17


$ 71

Items impacting income before income taxes:






Amortization


5


5


Restructuring charges, net


(1)


1


Strategic transaction expenses


2


3


Loss on investment in Hyliion




17


Loss on disposal group held for sale




5


Other items


2



Items impacting income taxes:






Net income tax expense on items above


(2)


(6)


Income tax expense attributable to various discrete tax matters




1

Adjusted net income attributable to the parent


$ 23


$ 97







Diluted shares - as reported


145.3


146.4

Adjusted diluted shares


145.3


146.4







Diluted adjusted EPS


$ 0.16


$ 0.66

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/dana-incorporated-reports-2022-first-quarter-financial-results-301533859.html

SOURCE Dana Incorporated