Dana Incorporated announces strong financial results for the first quarter of 2019.
- Record first-quarter sales of $2.2 billion, an increase of $25 million compared with first-quarter 2018; represents 5% growth on a constant-currency basis
- Net income attributable to Dana of $98 million; diluted EPS of $0.68
- Record adjusted EBITDA of $257 million, an increase of $9 million
- Margin of 11.9% of sales, an expansion of 30 basis points
- Record diluted adjusted EPS of $0.78, an improvement of 4% over first-quarter 2018
- Awarded 2019 Automotive News PACE Award
- Completed purchase of SME Group; Drive Systems segment from Oerlikon Group
"Dana achieved record sales this quarter, which represents our 10th consecutive quarter of year-over-year sales growth," says James Kamsickas, Dana President and Chief Executive Officer. "We remain focused on strong execution and top-line growth as we work to fully integrate our recent acquisitions, launch new products, and position the company for success as mobility markets transition to electric propulsion."
First-quarter 2019 Financial Results
Sales for the first quarter of 2019 totaled $2.16 billion, compared with $2.14 billion in the same period of 2018, representing a $25 million improvement. On a constant-currency basis, sales grew 5% over the same period last year. The increase was attributable to conversion of sales backlog, higher end-market demand, and one month of benefit from the ODS acquisition, partially offset by unfavorable currency translation.
Dana reported net income of $98 million for the first quarter of 2019, compared with net income of $108 million in the same period of 2018. The difference was primarily due to $32 million of one-time costs related to recent acquisitions, including transaction expenses, financing charges, and elevated restructuring expenses to support cost synergies. Partially offsetting these expenses was lower income tax expense in the first quarter of 2019 due to the release of certain valuation allowances in the U.S.
Reported diluted earnings per share were $0.68, compared with $0.73 in the first quarter of 2018.
Adjusted EBITDA for the first quarter of 2019 was $257 million, compared with $248 million for the same period last year. Profit in the first quarter of 2019 benefited from both organic and inorganic growth, partially offset by higher commodity costs and the impact of unfavorable currency translation related to the strengthening of the U.S. dollar.
Diluted adjusted earnings per share were $0.78 in the first quarter of 2019, compared with $0.75 in the same period last year.
Operating cash flow in the first quarter of 2019 was a use of $16 million, compared with a use of $28 million in the same period of 2018. Adjusted free cash flow was a use of $114 million, compared with a use of $93 million in the first quarter of 2018. Higher earnings and lower year-over-year working capital requirements were more than offset by increased investment to support new program launches.
The company repurchased 1.4 million shares of common stock in the first quarter of 2019, offsetting the dilutive impact of stock grants.
Company Affirms 2019 Full-year Financial Targets
The company affirmed previously announced guidance ranges of:
- Sales of $8.950 to $9.350 billion;
- Adjusted EBITDA of $1.085 billion to $1.165 billion, an implied adjusted EBITDA margin of approximately 12.3% at the midpoint of the range;
- Diluted adjusted EPS1 of $2.95 to $3.45;
- Operating cash flow of approximately 5.5%; and
- Adjusted free cash flow of approximately 3.0%.
"Our strong first quarter supports delivering our full-year guidance and keeps us firmly on the path to achieve our long-term targets," said Jonathan Collins, executive vice president and chief financial officer of Dana. "Our outlook for 2019 and 2020 continues to be positive due to our robust sales backlog, stable end markets, and accretive acquisitions."