PR Newswire | Apr 28, 2021 06:59AM EDT

Including Higher Sales; Raises Full-year Guidance

04/28 05:59 CDT

Dana Incorporated Reports Strong 2021 First-quarter Financial Results; Including Higher Sales; Raises Full-year Guidance MAUMEE, Ohio, April 28, 2021

MAUMEE, Ohio, April 28, 2021 /PRNewswire/ --

Key Highlights

* Sales of $2.3 billion, an increase of $337 million * Net income attributable to Dana of $71 million, an increase of $13 million * Diluted EPS of $0.48, an increase of $0.08 * Adjusted net income attributable to Dana of $97 million, an increase of $29 million * Adjusted EBITDA of $234 million, margin of 10.3 percent of sales * Diluted adjusted EPS of $0.66 * Operating cash flow of $27 million * Acquisition of Pi Innovo LLC, further enhances e-Propulsion software, controls, and electronics capabilities

Dana Incorporated (NYSE: DAN) today announced financial results for the first quarter of 2021.

"Dana realized higher sales of $2.3 billion in the first quarter as a result of continued strength in the light-truck market, as well as growth in both the commercial-vehicle and off-highway markets," said James Kamsickas, Dana chairman and CEO.

"While our end-markets have recovered from last year's shutdowns, higher costs related to supply-chain disruptions and shipping constraints continue to challenge the mobility industry. Our established multi-end-market presence tempers these outside pressures as we continue to execute our enterprise strategy, launch our significant new business backlog, and focus on strengthening our vehicle electrification position."

First-quarter 2021 Financial ResultsSales for the first quarter of 2021 totaled $2.26 billion, compared with $1.93 billion in the same period of 2020, representing a $337 million improvement driven by strong customer demand and the conversion of sales backlog.

Adjusted EBITDA for the first quarter of 2021 was $234 million, compared with $205 million for the same period in 2020. Profit conversion on higher sales in the first quarter of 2021 was tempered by increased raw material and supply chain constraints.

Adjusted net income attributable to Dana and diluted adjusted earnings per share were $97 million and $0.66 for the first quarter of 2021, $29 million and $0.19 higher than the prior year due to the conversion of higher market demand in this year's first quarter.

Operating cash flow in the first quarter of 2021 was $27 million, compared with a use of $51 million in the same period of 2020.

Adjusted free cash flow was a use of $26 million, compared with a use of $114 million in the first quarter of 2020. Adjusted free cash flow in this year's first quarter benefited from higher earnings and lower working capital requirements.

"As markets continue to recover from the challenges of the global pandemic, strong first-quarter sales provide the conviction to increase our full-year guidance as we accelerate the achievement of our long-term growth targets," said Jonathan Collins, executive vice president and chief financial officer of Dana.

Revised 2021 Financial Targets1

* Sales of $8.50 to $9.00 billion; * Adjusted EBITDA of $920 million to $1.0 billion, an implied adjusted EBITDA margin of approximately 11 percent at the midpoint of the range; * Diluted adjusted EPS of $2.10 to $2.60; * Operating cash flow of approximately 7 to 8 percent of sales; and * Adjusted free cash flow of approximately 3 to 3.5 percent of sales.

^ Net income and diluted EPS guidance are not provided, as discussed below in1 Non-GAAP Financial Information.

Dana to Host Conference Call at 9 a.m. Wednesday, April 28Dana will discuss its first-quarter results in a conference call at 9 a.m. EDT on Wednesday, April 28. 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. 8399308 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 28 by dialing 1-855-859-2056 (U.S. or Canada) or 1-404-537-3406 (international) and entering conference I.D. 8399308. A webcast replay will also be available after 5 p.m. EDT and may be accessed via Dana's investor website.

Non-GAAP Financial InformationAdjusted 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. Adjusted free cash flow is a non-GAAP financial measure which we have defined as net cash provided by (used in) operating activities excluding discretionary 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 in accordance with 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 our adjusted EBITDA and diluted adjusted EPS outlook 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 StatementsCertain 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 IncorporatedDana is a leader in the design and manufacture of highly efficient propulsion and energy-management solutions for all mobility markets across the globe. The company's conventional and clean-energy solutions 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 $7.1 billion in 2020 with 38,000 associates in 33 countries across six continents. Founded in 1904, Dana was named one of "America's Most Responsible Companies 2021" by Newsweek for its emphasis on sustainability and social responsibility. The company is driven by a high-performance culture that focuses on its people, which has earned it global recognition as a top employer, including "World's Best Employer' from Forbes magazine. Learn more at dana.com.

DANA INCORPORATED

Consolidated Statement of Operations (Unaudited)

For the Three Months Ended March 31, 2021 and 2020

Three Months Ended

(In millions, except per share amounts) March 31,

2021 2020

Net sales $ 2,263 $ 1,926

Costs and expenses

Cost of sales 2,012 1,720

Selling, general and administrative 119 106expenses

Amortization of intangibles 4 3

Restructuring charges, net 1 3

Impairment of goodwill (51)

Other income (expense), net (19) 4

Earnings before interest and income taxes 108 47

Interest income 2 2

Interest expense 34 29

Earnings before income taxes 76 20

Income tax expense (benefit) 22 (16)

Equity in earnings of affiliates 14 2

Net income 68 38

Less: Noncontrolling interests net 1 2income

Less: Redeemable noncontrolling (4) (22)interests net loss

Net income attributable to the parent $ 71 $ 58company

Net income per share available to commonstockholders

Basic $ 0.49 $ 0.40

Diluted $ 0.48 $ 0.40

Weighted-average shares outstanding - Basic 144.9 144.2

Weighted-average shares outstanding - 146.4 144.8Diluted

DANA INCORPORATED

Consolidated Statement of ComprehensiveIncome (Unaudited)

For the Three Months Ended March 31, 2021 and2020

Three Months Ended

(In millions) March 31,

2021 2020

Net income $ 68 $ 38

Other comprehensive income (loss), net oftax:

Currency translation adjustments (5) (154)

Hedging gains and losses (17) 29

Defined benefit plans 3 3

Other comprehensive loss (19) (122)

Total comprehensive income (loss) 49 (84)

Less: Comprehensive loss attributable to 1 17 noncontrolling interests

Less: Comprehensive loss attributable to 3 14 redeemable noncontrolling interests

Comprehensive income (loss) attributable to $ 53 $ (53)the parent company

DANA INCORPORATED

Consolidated Balance Sheet (Unaudited)

As of March 31, 2021 and December 31, 2020

(In millions, except share and March 31, December 31,per share amounts)

2021 2020

Assets

Current assets

Cash and cash equivalents $ 483 $ 559

Marketable securities 26 21

Accounts receivable

Trade, less allowance fordoubtful accounts of $6 in 2021 1,428 1,201and $7 in 2020

Other 237 231

Inventories 1,260 1,149

Other current assets 139 127

Total current assets 3,573 3,288

Goodwill 488 479

Intangibles 250 236

Deferred tax assets 613 611

Other noncurrent assets 153 169

Investments in affiliates 149 152

Operating lease assets 192 190

Property, plant and equipment, 2,184 2,251net

Total assets $ 7,602 $ 7,376

Liabilities and equity

Current liabilities

Short-term debt $ 26 $ 26

Current portion of long-term 8 8debt

Accounts payable 1,536 1,331

Accrued payroll and employee 203 190benefits

Taxes on income 44 35

Current portion of operating 42 43lease liabilities

Other accrued liabilities 311 308

Total current liabilities 2,170 1,941

Long-term debt, less debtissuance costs of $26 in 2021 2,420 2,420and $27 in 2020

Noncurrent operating lease 157 154liabilities

Pension and postretirement 463 479obligations

Other noncurrent liabilities 340 368

Total liabilities 5,550 5,362

Commitments and contingencies

Redeemable noncontrolling 182 180interests

Parent company stockholders'equity

Preferred stock, 50,000,000shares authorized, $0.01 parvalue, - -

no shares outstanding

Common stock, 450,000,000shares authorized, $0.01 par 2 2value, 145,142,687 and144,515,658 shares outstanding

Additional paid-in capital 2,415 2,408

Retained earnings 583 530

Treasury stock, at cost(10,657,998 and 10,442,582 (161) (156)shares)

Accumulated other comprehensive (1,044) (1,026)loss

Total parent company 1,795 1,758stockholders' equity

Noncontrolling interests 75 76

Total equity 1,870 1,834

Total liabilities and $ 7,602 $ 7,376equity

DANA INCORPORATED

Consolidated Statement of Cash Flows (Unaudited)

For the Three Months Ended March 31, 2021 and 2020

Three Months Ended

(In millions) March 31,

2021 2020

Operating activities

Net income $ 68 $ 38

Depreciation 88 85

Amortization 7 4

Amortization of deferred financing charges 2 2

Earnings of affiliates, net of dividends (14) (2)received

Stock compensation expense 5 4

Deferred income taxes (6) (35)

Pension expense, net 1

Impairment of goodwill 51

Change in working capital (133) (183)

Other, net 10 (16)

Net cash provided by (used in) operating 27 (51)activities

Investing activities

Purchases of property, plant and equipment (53) (63)

Acquisition of businesses, net of cash (17) (8)acquired

Purchases of marketable securities (11) (12)

Proceeds from sales of marketable 6 6securities

Settlements of undesignated derivatives (3)

Other, net 2 (5)

Net cash used in investing activities (73) (85)

Financing activities

Net change in short-term debt (1) 298

Proceeds from long-term debt 2 4

Repayment of long-term debt (1) (1)

Deferred financing payments (2)

Dividends paid to common stockholders (14) (15)

Distributions to noncontrolling interests (1)

Contributions from noncontrolling interests 1 2

Other, net (1) (4)

Net cash provided by (used in) financing (16) 283activities

Net increase (decrease) in cash, cash (62) 147equivalents and restricted cash

Cash, cash equivalents and restricted cash - 567 518beginning of period

Effect of exchange rate changes on cash (12) (29)balances

Cash, cash equivalents and restricted cash - $ 493 $ 636end of period

DANA INCORPORATED

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

Free Cash Flow and Adjusted Free Cash Flow (Unaudited)

For the Three Months Ended March 31, 2021 and 2020

Three Months Ended

(In millions) March 31,

2021 2020

Net cash provided by (used in) operating $ 27 $ (51)activities

Purchase of property, plant and equipment (53) (63)

Free cash flow (26) (114)

Discretionary pension contributions

Adjusted free cash flow $ (26) $ (114)

DANA INCORPORATED

Segment Sales and Segment EBITDA (Unaudited)

For the Three Months Ended March 31, 2021 and 2020

Three Months Ended

(In millions) March 31,

2021 2020

Sales

Light Vehicle $ 991 $ 808

Commercial Vehicle 352 333

Off-Highway 632 532

Power Technologies 288 253

Total Sales $ 2,263 $ 1,926

Segment EBITDA

Light Vehicle $ 100 $ 83

Commercial Vehicle 14 21

Off-Highway 80 72

Power Technologies 41 30

Total Segment EBITDA 235 206

Corporate expense and other items, net (1) (1)

Adjusted EBITDA $ 234 $ 205

DANA INCORPORATED

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

For the Three Months Ended March 31, 2021 and 2020

Three Months Ended

(In millions) March 31,

2021 2020

Segment EBITDA $ 235 $ 206

Corporate expense and other items, net (1) (1)

Adjusted EBITDA 234 205

Depreciation (88) (85)

Amortization (7) (4)

Non-service cost components of pension and (2) (2)OPEB costs

Restructuring charges, net (1) (3)

Stock compensation expense (5) (4)

Strategic transaction expenses (3) (6)

Loss on investment in Hyliion (17)

Loss on disposal group held for sale (7)

Impairment of goodwill (51)

Other items 4 (3)

Earnings before interest and income taxes 108 47

Interest income 2 2

Interest expense 34 29

Earnings before income taxes 76 20

Income tax expense (benefit) 22 (16)

Equity in earnings of affiliates 14 2

Net income $ 68 $ 38

DANA INCORPORATED

Reconciliation of Net Income Attributable to the Parent Company to

Adjusted Net Income Attributable to the Parent Company and

Diluted Adjusted EPS (Unaudited)

For the Three Months Ended March 31, 2021 and 2020

(In millions, except per share amounts)

Three Months Ended

March 31,

2021 2020

Net income attributable to parent company $ 71 $ 58

Items impacting income before incometaxes:

Amortization 5 4

Restructuring charges, net 1 3

Strategic transaction expenses 3 6

Loss on investment in Hyliion 17

Loss on disposal group held for sale 5

Impairment of goodwill 31

Items impacting income taxes:

Net income tax expense on items above (6) (3)

Tax (benefit) attributable to various 1 (31) discrete tax matters

Adjusted net income attributable to the $ 97 $ 68parent

Diluted shares - as reported 146.4 144.8

Adjusted diluted shares 146.4 144.8

Diluted adjusted EPS $ 0.66 $ 0.47

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SOURCE Dana Incorporated