TOLEDO, Ohio, Aug. 7 OH-Dana-Holding-erns
TOLEDO, Ohio, Aug. 7 /PRNewswire-FirstCall/ -- Dana Holding Corporation
(NYSE: DAN) has announced its second-quarter 2008 results.
(Logo: http://www.newscom.com/cgi-bin/prnh/19990903/DANA )
Second-quarter highlights include:
-- Sales of $2,333 million, a 2-percent increase compared to 2007,
primarily because of currency effects;
-- Net loss of $140 million, including an $82 million non-cash impairment
charge. This compares to a net loss of $133 million in the second
quarter of 2007;
-- Earnings before interest, taxes, depreciation, amortization, and
restructuring (EBITDA) of $128 million, compared with $143 million in
2007;
-- Strong cash balance of $1.2 billion and total liquidity of $1.6 billion
at June 30, 2008; and
-- Free cash flow of $38 million.
Dana Making Progress in Turnaround
"We are making progress in our turnaround despite unprecedented headwinds
in North America," said Executive Chairman John Devine. "The combination of
much lower production volumes and higher steel costs has put considerable
pressure on our 2008 operating results.
"But we are working to offset these challenges through pricing, additional
restructuring, and cost reductions," he added. "And we remain focused on our
game plan to turn around Dana by rebuilding the management team, improving
operations, tightening our strategic direction, and employing a strong balance
sheet."
Added Chief Executive Officer Gary Convis, "For the near term, we continue
to scale our North American operations - through facility consolidations and
workforce reductions - to reflect a market that's very different than what was
expected just six months ago. This will necessitate the reduction of
approximately 3,000 positions over the course of 2008, including the planned
reduction of 500 salaried positions announced last week. At the same time, we
are experiencing modest employment growth in the markets where our business is
performing better.
"Longer term, we're picking up speed with introducing what is essentially
a new way of managing our business, manufacturing our products, and measuring
our performance worldwide," he added. "The new Dana Operating System is
already enabling our people to drive improved product quality, customer
satisfaction, and financial performance."
Business Highlights
Total EBITDA of $128 million in the second quarter was $15 million below
2007 results for the same period. This primarily reflected higher steel costs
of $25 million (net of recovery actions), lower North American production of
$22 million, unfavorable currency effects of $26 million, and reduced non-
steel pricing of $6 million. These negative developments were partially
offset by cost savings of $64 million.
At June 30, 2008, cash balances remained strong at $1.2 billion, with
available global liquidity of $1.6 billion. Free cash flow was $38 million
for the second quarter, which was largely achieved through reduced working
capital of $69 million during the period.
Six-Month Results
Sales for the six months ended June 30, 2008 were $4,645 million which
compares to $4,434 million for the same period in 2007. For the first six
months of 2008, the company reported net income of $545 million compared to a
net loss of $225 million for the same period in 2007. The six-month 2008
results include a net gain of $754 million recognized in connection with the
company's emergence from bankruptcy and application of fresh start accounting
in January.
EBITDA of $275 for the first six months of 2008 improved from the $247
million for the same period in 2007, as cost reduction actions initiated
during the first half of 2008, combined with previously achieved annual cost
savings and pricing improvements more than offset the earnings reduction
attributable to lower North American production levels and higher steel costs.
Dana to Host Second-Quarter Conference Call at 10 a.m. Today
Dana will discuss its second-quarter results in a conference call at 10
a.m. EDT today. Participants may listen to the audio portion of the
conference call either through audio streaming online or by telephone. Slide
viewing is only available online via a link provided on the Dana Investor Web
site. To dial into the conference call, domestic locations should call 1-888-
311-4590 (Conference I.D. # 55462661). International locations should call 1-
706-758-0054 (Conference I.D. # 55462661). Please ask for the Dana Holding
Corporation Financial Webcast and Conference Call. Phone registration will be
available beginning at 9:30 a.m. An audio recording of the call will be
available after 5 p.m. To access this recording, please dial 1-800-642-1687
(U.S. or Canada) or 1-706-645-9291 (international) and enter the conference
I.D. number 55462661. A webcast replay will also be available after 5 p.m.
today, and may be accessed via the Dana Investor Web site.
Non-GAAP Measures
In connection with Dana's emergence from bankruptcy on January 31, 2008
and the application of fresh start accounting in accordance with the
provisions of the American Institute of Certified Public Accountants'
Statement of Position 90-7, the post-emergence results of the successor
company for the five months ended June 30, 2008 and the pre-emergence results
of the predecessor company for the one month ended January 31, 2008 are
presented separately as successor and predecessor results in the financial
statements presented in accordance with generally accepted accounting
principles (GAAP). This presentation is required by GAAP as the successor
company is considered to be a new entity, and the results of the new entity
reflect the application of fresh start accounting. For the readers'
convenience and interest in this earnings release, we have combined the
separate successor and predecessor periods to derive combined results for the
six months ended June 30, 2008. The financial information accompanying this
release provides the separate successor and predecessor GAAP results for the
applicable periods, along with the combined results described above for the
first half of 2008.
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, which collectively produce more than 70 million vehicles
annually. Based in Toledo, Ohio, the company's operations employ
approximately 35,000 people in 26 countries and reported 2007 sales of $8.7
billion. For more information, please visit: www.dana.com .
DANA HOLDING CORPORATION
Consolidated Statement of Operations (Unaudited)
For the Three Months Ended June 30, 2008 and 2007
Three Months Ended
June 30,
Dana Prior Dana
2008 2007
Net sales $2,333$2,289
Costs and expenses
Cost of sales 2,206 2,141
Selling, general and administrative expenses 8488
Amortization of intangibles 19
Realignment charges, net 40 134
Impairment of goodwill75
Impairment of intangible assets7
Other income, net 2032
Loss from continuing operations before interest,
reorganization items and income taxes(78) (42)
Interest expense (contractual interest of $17
for the one month ended January 31, 2008 and
$55 for the three months ended June 30, 2007 3528
Reorganization items, net 1238
Loss from continuing operations before income taxes (125) (108)
Income tax expense(12) (3)
Minority interests (3) (4)
Equity in earnings of affiliates210
Loss from continuing operations (138) (105)
Loss from discontinued operations (2) (28)
Net loss (140) (133)
Preferred stock dividend requirements 8
Net loss available to common stockholders $(148)$(133)
Net loss from continuing operations:
Basic $(1.46) $(0.70)
Diluted $(1.46) $(0.70)
Net loss from discontinued operations
Basic $(0.01) $(0.19)
Diluted $(0.01) $(0.19)
Net loss available to common
stockholders
Basic $(1.47) $(0.89)
Diluted $(1.47) $(0.89)
Average common shares outstanding:
Basic 100 150
Diluted160 150
DANA HOLDING CORPORATION
Consolidated Statement of Operations (Unaudited)
For the Six Months Ended June 30, 2008 and 2007
Prior Prior
Dana Dana Combined Dana
Five One Six Six
Months MonthMonths Months
EndedEndedEndedEnded
June 30, Jan. 31, June 30, June 30,
2008 2008 2008 (1) 2007
Net sales $3,894 $751 $4,645 $4,434
Costs and expenses
Cost of sales 3,683 7024,3854,184
Selling, general and
administrative expenses149 34 183 184
Amortization of intangibles 3131
Realignment charges, net 45 12 57 153
Impairment of goodwill 7575
Impairment of intangible assets 7 7
Other income, net528 60 78
Income (loss) from continuing
operations before interest,
reorganization items and income
taxes (44) 11 (33) (9)
Interest expense (contractual
interest of $17 for the one
month ended January 31, 2008 and
$105 for the six months ended
June 30, 2007) 628 70 51
Reorganization items, net 21 98 119 75
Fresh start accounting adjustments 1,0091,009
Income (loss) from continuing
operations before income taxes (127) 914 787 (135)
Income tax expense (32)(199)(231) (18)
Minority interests(5) (2) (7) (6)
Equity in earnings of affiliates 325 18
Income (loss) from
continuing operations (161) 715 554 (141)
Loss from discontinued operations (3) (6) (9) (84)
Net income (loss) (164) 709 545 (225)
Preferred stock dividend requirements 1313
Net income (loss) available to
common stockholders $(177)$709 $532$(225)
Net income (loss) from continuing
operations:
Basic $(1.74) $4.77$(0.94)
Diluted$(1.74) $4.75$(0.94)
Net loss from discontinued
operations
Basic $(0.02) $(0.04) $(0.56)
Diluted$(0.02) $(0.04) $(0.56)
Net income (loss) available
to common stockholders:
Basic $(1.76) $4.73$(1.50)
Diluted$(1.76) $4.71$(1.50)
Average common shares outstanding:
Basic 100 150 150
Diluted 160 150 150
(1) See "Non-GAAP Measures" in body of press release for comments
regarding the presentation of combined information for the six
months ended June 30, 2008
DANA HOLDING CORPORATION
Consolidated Balance Sheet
(Unaudited)
At June 30, 2008 and December 31, 2007
Dana Prior Dana
June 30, December 31,
Assets2008 2007
Current assets
Cash and cash equivalents$1,191$1,271
Restricted cash 93
Accounts receivable
Trade, less allowance for doubtful accounts
of $21 in 2008 and $20 in 2007 1,431 1,197
Other 295 295
Inventories
Raw materials 401 331
Work in process and finished goods 640 481
Assets of discontinued operations 24
Other current assets147 100
Total current assets4,105 3,792
Goodwill248 349
Intangibles 649 1
Investments and other assets269 348
Investments in affiliates 172 172
Property, plant and equipment, net2,039 1,763
Total assets $7,482$6,425
Liabilities and stockholders' equity (deficit)
Current liabilities
Notes payable, including current portion of
long-term debt $62 $283
Debtor-in-possession financing900
Accounts payable 1,203 1,072
Accrued payroll and employee benefits 265 258
Liabilities of discontinued operations 9
Taxes on income 16012
Other accrued liabilities 501 418
Total current liabilities 2,191 2,952
Liabilities subject to compromise 3,511
Deferred employee benefits and other
non-current liabilities879 630
Long-term debt1,31819
Minority interest in consolidated subsidiaries 11595
Commitments and contingencies
Total liabilities 4,503 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, 99,735,387 issued and outstanding1
Prior Dana common stock, $1.00 par value,
350,000,000 authorized, 150,245,250 issued
and outstanding150
Additional paid-in capital2,310 202
Accumulated deficit(177) (468)
Accumulated other comprehensive income (loss)74 (666)
Total stockholders' equity (deficit)2,979 (782)
Total liabilities and stockholders'
equity (deficit) $7,482$6,425
DANA HOLDING CORPORATION
Consolidated Statement of Cash Flows (Unaudited)
For the Three Months Ended June 30, 2008 and 2007
Three Months Ended
Dana Prior Dana
June 30, June 30,
2008 2007
Cash flows - operating activities
Net income (loss) $(140)$(133)
Depreciation 7269
Amortization of intangibles23
Amortization of inventory valuation
Amortization of deferred financing charges and
original issue discount7
Impairment of goodwill and other intangible assets 82
Non-cash portion of U.K. pension charge 60
Minority interest 3 6
Reorganization:
Gain on settlement of liabilities subject to
compromise
Payment of claims (1)(9)
Reorganization items net of cash payments(5) (20)
Fresh start adjustments
Payments to VEBAs (27)
Loss (gain) on sale of businesses and assets(22)
Change in working capital 69 (12)
Other, net(26) (56)
Net cash flows provided by (used in)
operating activities (1) 76 (135)
Cash flows - investing activities
Purchases of property, plant and equipment (1)(47) (55)
Proceeds from sale of businesses and assets 93
Change in restricted cash (88)
Other (12) 40
Net cash flows provided by (used in)
investing activities (59) (10)
Cash flows - financing activities
Proceeds from (repayment of) debtor-
in-possession facility
Net change in short-term debt (81) (93)
Payment of DCC Medium Term Notes
Proceeds from Exit Facility debt
Original issue discount fees
Deferred financing fees(1)
Repayment of Exit Facility debt(3)
Issuance of Series A and Series B preferred stock
Preferred dividends paid (11)
Other (7) (2)
Net cash flows provided by (used in)
financing activities(103) (95)
Net increase (decrease) in cash and cash equivalents (86) (240)
Cash and cash equivalents - beginning of period 1,283 1,250
Effect of exchange rate changes on cash balances (6) 11
Net change in cash of discontinued operations(5)
Cash and cash equivalents - end of period $1,191$1,016
(1) Free cash flow of $38 in 2008 and $(190) 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 (Unaudited)
For the Six Months Ended June 30, 2008 and 2007
Six Months Ended
June 30, 2008
Prior Prior
Dana Dana CombinedDana
Five One Six Six
MonthsMonth MonthsMonths
EndedEndedEnded Ended
June 30, Jan. 31, June 30, June 30,
2008 2008 2008 (1) 2007
Cash flows - operating activities
Net income (loss) $(164)$709 $545$(225)
Depreciation 120 23 143 139
Amortization of intangibles 3838
Amortization of inventory valuation 1515
Amortization of deferred financing
charges and original issue discount 1111
Impairment of goodwill and other
intangible assets8282
Non-cash portion of U.K. pension
charge 60
Minority interest 5276
Deferred income taxes(17) 191 174 (7)
Reorganization:
Gain on settlement of liabilities
subject to compromise(27) (27)
Payment of claims(97) (97)
Reorganization items net of cash
payments(23) 79 567
Fresh start adjustments(1,009) (1,009)
Payments to VEBAs (733) (55)(788) (27)
Loss (gain) on sale of businesses
and assets178 (8)
Change in working capital(55) (61)(116) (64)
Other, net (34) 19 (15) (33)
Net cash flows provided by (used in)
operating activities (851)(122)(973)(152)
Cash flows - investing activities
Purchases of property, plant and
equipment (76) (16) (92) (94)
Proceeds from sale of businesses and
assets 55 421
Change in restricted cash 93 93 (88)
Other (4) (5) (9) 25
Net cash flows provided by (used in)
investing activities(80) 77 (3) 264
Cash flows - financing activities
Proceeds from (repayment of) debtor-
in-possession facility (900)(900) 200
Net change in short-term debt(88) (18)(106) (28)
Payment of DCC Medium Term Notes (136)(136)
Proceeds from Exit Facility debt 801,3501,430
Original issue discount fees (114)(114)
Deferred financing fees (1) (40) (41)
Repayment of Exit Facility debt (7) (7)
Issuance of Series A and Series B
preferred stock 771 771
Preferred dividends paid (11) (11)
Other(12) (1) (13) (2)
Net cash flows provided by (used in)
financing activities(39) 912 873 170
Net increase (decrease) in cash and
cash equivalents (970) 867 (103) 282
Cash and cash equivalents -
beginning of period 2,1471,2711,271 704
Effect of exchange rate changes on
cash balances145 19 28
Net change in cash of discontinued
operations 44 (13)
Cash and cash equivalents - end of
period $1,191 $2,147 $1,191 $1,001
(1) See "Non-GAAP Measures" in body of press release for comments
regarding the presentation of combined information for the six
months ended June 30, 2008
DANA HOLDING CORPORATION
SEGMENT EBITDA RECONCILIATION (Unaudited)
Reconciliation of Segment EBITDA to Income (loss)
from Continuing Operations Before Income Taxes
Three Months Ended
June 30,
Dana Prior Dana
20082007
ASG
Light Axle $32 $35
Driveshaft 45 32
Sealing 26 22
Thermal 4 7
Structures 29 35
Eliminations and other (10)
Total ASG 136$121
HVSG
Commercial Vehicle 12 13
Off-Highway 50 46
Eliminations and other (2) (2)
Total HVSG 60 57
Total Segment EBITDA 196 178
Shared services and administrative (36)(44)
Other income (loss) (24) (9)
Foreign exchange not in segments (8) 18
EBITDA 128 143
Depreciation (72)(69)
Amortization (23)
Realignment (40) (134)
DCC EBIT (3) 9
Goodwill impairment (75)
Impairment of other intangible assets (7)
Reorganization items, net(12)(38)
Interest expense (35)(28)
Interest income 14 9
Loss from continuing operations before
income taxes $(125) $(108)
DANA HOLDING CORPORATION
SEGMENT EBITDA RECONCILIATION (Unaudited)
Reconciliation of Segment EBITDA to Income (loss)
from Continuing Operations Before Income Taxes
Six Months Ended June 30, 2008
Prior Prior
Dana Dana CombinedDana
Five One Six Six
MonthsMonth Months Months
EndedEndedEnded Ended
June 30, Jan. 31, June 30, June 30,
2008 2008 2008 (1) 2007
ASG
Light Axle $52 $8 $60$47
Driveshaft 71 12 83 50
Sealing 417 48 40
Thermal 83 11 14
Structures 465 51 58
Eliminations and other (5) (3) (8) (16)
Total ASG $213 $32 $245 $193
HVSG
Commercial Vehicle234 27 30
Off-Highway 82 15 97 87
Eliminations and other(4) (4)(4)
Total HVSG 101 19 120113
Segment EBITDA 314 51 365306
Shared services and
administrative(67) (13) (80) (85)
Other income (21) (21) 4
Foreign exchange not in segments 74 11 22
EBITDA 233 42 275247
Depreciation (120) (23)(143) (139)
Amortization (53) (53)
Realignment(45) (12) (57) (153)
DCC EBIT(2) (2)19
Goodwill impairment(75) (75)
Impairment of other intangible
assets (7) (7)
Reorganization items, net (21) (98)(119) (75)
Interest expense (62) (8) (70) (51)
Interest income 254 29 17
Fresh start accounting adjustments1,0091,009
Income (loss) from continuing
operations before income taxes $(127)$914 $787 $(135)
(1) See "Non-GAAP Measures" in body of press release for comments
regarding the presentation of combined information for the six
months ended June 30, 2008
SOURCE Dana Holding Corporation
