Dana Reports Second-Quarter Results

Dana Holding Corporation announced its second-quarter 2011 results, including net income of $68 million and adjusted EBITDA of $201 million, which compared to $9 million and $154 million, respectively, for the prior-year period.

Sales for the quarter were $1.9 billion, up more than 25% over the second quarter of 2010. Higher production volumes and ongoing operating improvements enabled Dana to achieve an adjusted EBITDA margin of 10.4%, compared to 10.1% for the previous and prior-year periods. Diluted adjusted earnings per share (EPS) in the quarter were $0.45, compared to $0.24 in the prior-year period.

Dana generated free cash flow of $44 million during the second quarter. While the company made cash investments in the quarter totaling $137 million in China and India, global liquidity remains strong at $1.2 billion.

"Our second-quarter results show continued and overall positive momentum in our business units and our markets," says Dana President and Chief Executive Officer Roger J. Wood. "New business wins demonstrate that our customers see value in our driveline and power technologies, as well as our global footprint. Our focus is clear: We will continue to develop new products and technologies, address growing customer needs in emerging markets, and improve our organizational effectiveness around the world."

Six-Month Results

Net income for the six months ended June 30, 2011, was $91 million, excluding $53 million of one-time charges associated with the refinancing and restructuring of debt in January; this compares with a net loss of $22 million in the first half of 2010.

Adjusted EBITDA for the first six months of the year was $382 million, up $120 million over the same period in 2010. Sales for the six-month period were $3.7 billion, up $700 million over the same period one year ago.  

More Growth Steps in Emerging Markets and the Aftermarket

Dana completed two transactions in June that will enhance its position in the emerging markets of China and India. The company increased its stake in Dongfeng Dana Axle Co., Ltd. (DDAC), a commercial-vehicle axle joint venture based in China, to 50%. DDAC is the sole supplier of medium- and heavy-truck axles to Dongfeng Motor Co., Ltd., which is the largest commercial truck manufacturer in China. With four plants and a technical center, DDAC provides Dana with a major operational hub in the Chinese market, which is larger than all other commercial truck markets around the world combined. Dana engineering, manufacturing, and assembly expertise is already being leveraged to help strengthen DDAC's performance. DDAC had sales of approximately $1 billion in 2010.

Dana also completed the acquisition of the axle drive head and final assembly operations of its Indian joint venture, Axles India, Ltd. Key customers of this business are Ashok Leyland and Mahindra & Mahindra.    

Additionally, Dana broke ground in May on a new technical center – its fourteenth globally – in Wuxi, Jiangsu, China, to strengthen engineering support for customers in all vehicle markets. It is expected to be fully operational by the end of 2011.  

Finally, Dana broke ground on a new aftermarket distribution center in Gyor, Hungary, to serve the European market. The company's focus on the aftermarket also involved the launch of the new SVL line of drivetrain components for automotive, commercial vehicle, and off-highway customers. The SVL line offers quality replacement parts for older, post-warranty vehicles.

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