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-- Sales of $1.68 billion
-- Net income of $42 million
-- Adjusted EBITDA of $158 million, 9.4 percent of sales
-- Free cash flow use of $44 million
-- Financial results in line with Company expectations
-- Share Repurchase Program continues
Dana Holding Corporation (NYSE: DAN) Thurstday announced results for the first quarter of 2013. Sales were $1.68 billion, compared with $1.96 billion for the same period in 2012. Lower market volumes, principally the North American commercial vehicle and European and Asian off-highway markets, reduced year-over year sales by about $159 million, with light-vehicle program roll-offs and a divestiture a year ago reducing sales by an additional $101 million.
In line with reduced sales, net income for the quarter was $42 million, compared with $70 million for the same period in 2012, and the company's diluted adjusted earnings per share (EPS) was $0.28, compared with $0.44 in the first quarter of 2012.
Adjusted EBITDA for the quarter was $158 million, compared with $212 million for the prior-year period. The reduction was driven mostly by lower sales volumes, which accounted for about $44 million of the decrease. In addition, the devaluation of the Venezuelan bolivar in February further reduced adjusted EBITDA in the Light Vehicle Driveline segment by $11 million, representing a margin impact of 70 basis points in the quarter. The company implemented recovery actions and expects to offset the majority of this impact over the remainder of 2013. These factors were partially offset by improved pricing and cost performance in the quarter.
Overall, adjusted EBITDA as a percent of sales for the quarter was 9.4 percent (10.1 percent excluding the Venezuelan currency devaluation), compared with 10.7 percent for the same period in 2012 and 9.6 percent in the fourth quarter of 2012.
Free cash flow was a use of $44 million in the quarter principally reflecting seasonal working capital outflows of $98 million, semi-annual interest payments on the company's unsecured senior notes of $30 million and capital spending of $29 million. This compares with $37 million during the first quarter of 2012, excluding a one-time voluntary contribution of $150 million to Dana's U.S. pension plans.
"Demand levels in a number of our key markets provided a bit of a headwind for us in the first quarter, but overall results were in line with our expectations. We continue to achieve solid margins in spite of challenging market conditions by focusing on those levers within our control," said company President and Chief Executive Officer Roger J. Wood. "Three of our four businesses improved EBITDA margins over last year's fourth quarter, further evidencing our continued focus on cost flexibility and contribution margins."
The company purchased about 1.4 million shares at a cost of about $24 million under its share repurchase program during the quarter. Since the board of directors authorized the program in October, Dana has repurchased about 3.6 million shares of common stock through April 23, resulting in $58 million being returned to shareholders. In addition, the board declared a common stock dividend of $0.05 per share payable May 31 to shareholders of record as of May 10. These actions demonstrate Dana's commitment to returning value to its shareholders.
Company Affirms 2013 Financial Targets
Dana affirmed its financial targets for full-year 2013:
* Sales of approximately $7.1 billion,
* Adjusted EBITDA of $800 million to $820 million,
* Adjusted EBITDA as a percent of sales of approximately 11.4 percent,
* Diluted adjusted EPS of $1.88 to $1.95 (excluding the impact of Dana's share repurchase program),
* Capital spending of $180 million to $200 million, and
* Free cash flow of $240 million to $260 million.
"We expect to capitalize on improved volumes through the remainder of the year. In particular, the performance of our Commercial Vehicle Driveline business is dependent on an expected uptick in market demand, and we are closely watching releases from our customers," Mr. Wood said. "By continuing to maintain our operational flexibility and executing our business model, we are confident in our ability to drive margins commensurate with top line growth."
Dana Earns PACE Awards
Dana earned a 2013 Automotive News PACE Award for its innovative Spicer® Diamond Series™ driveshaft. This industry-first one-piece aluminum driveshaft utilizes Dana's advanced proprietary manufacturing processes to significantly reduce weight by up to 40 percent while maintaining the strength of an all-steel system. The result is a very robust and significantly lighter driveshaft for improved fuel efficiency and load-carrying capacity.
This driveshaft eliminates the need for a center bearing, helping to reduce component complexity and weight by up to 100 pounds. Additionally, the Spicer® Diamond Series™ driveshaft requires no exterior tube painting and eliminates the metal inert gas (MIG) welding process, helping to reduce emissions during manufacturing.
New Technologies Introduced
Dana introduced a number of new products in the first quarter aimed at targeting specific market-value drivers, such as fuel economy, emissions control, and total cost of ownership. These technology solutions include:
* Best-in-class Spicer® AdvanTEK® 40 tandem axles for line-haul Class 8 trucks that improve fuel efficiency and reduce total cost of ownership;
* Enhanced Spicer Life Series® driveshafts capable of handling greater torque capacities than any other driveshaft in the class;
* Spicer® EconoTrek™ tandem axles that reduce weight by up to 450 pounds, delivering between a 2 and 3 percent improvement in fuel efficiency;
* Spicer® electric-vehicle gearbox with an optimized gear ratio that provides increased acceleration, enabling drivers to reach highway speeds more quickly; and
* A new Spicer® TE30 powershift transmission that provides reach stackers and heavy-duty forklift trucks with greater fuel economy and lower cost of ownership.
New Technical Research Center Opens in China
Dana also celebrated the opening of its new 129,000 square-foot technical center in Wuxi, Jiangsu Province, China. The Dana China Technical Center provides advanced product and applications engineering for original-equipment manufacturers in the light-vehicle, commercial-vehicle, and off-highway markets in China and throughout the Asia-Pacific region.
Conference Call Scheduled for 10 a.m. EDT Today
Dana will discuss its first-quarter results in a conference call at 10 a.m. EDT today. Participants may listen to the conference call via audio streaming online or telephone. Slide viewing is available via Dana's investor website
| Product Model | Inside Diameter | Outside Diameter | Thickness |
| 6906NKE NACHI | 30 | 47 | 9 |
| 6806NKE NACHI | 30 | 42 | 7 |