Full-year Results
Sales of $10.6 billion, an increase of $0.4 billion or 4 percent over last year
Net income of $38 million, compared with a net loss of $242 million in 2022
Adjusted EBITDA of $845 million, an increase of $145 million over last year
Adjusted EBITDA margin of 8 percent, a 110-basis-point improvement compared with 2022
Operating cash flow of $476 million
Record three-year new business sales backlog of $950 million, a $50 million increase over prior backlog
2024 guidance of approximately 3 percent increase in sales, 10 percent increase in adjusted EBITDA, $75 million increase in free cash flow
MAUMEE, Ohio, Feb. 20, 2024 /PRNewswire/ — Dana Incorporated (NYSE:DAN) today announced financial results for the fourth quarter and full-year 2023.
“With record sales reaching $10.6 billion for 2023, Dana continues its strong trajectory built on our balanced approach of supplying both conventional and clean-energy solutions to nearly every vehicle manufacturer around the globe. The Dana team successfully launched a company-record number of programs across all markets we serve, while delivering substantial profit conversion on our growth,” said James Kamsickas, chairman and chief executive officer.
“We are building on this strong momentum, as we expect to further expand sales and profit margin into 2024. Our record three-year new business backlog has grown to $950 million, marking the seventh consecutive year we have recorded an increase. This reflects our team’s relentless commitment to being a leading supplier to the world’s top vehicle manufacturers for internal combustion, hybrid, and electric vehicles.”
Fourth-quarter 2023 Financial Results
Sales for the fourth quarter of 2023 totaled $2.5 billion, compared with $2.6 billion in the same period of 2022. Lower sales in 2023 were driven by the impact of the UAW strike on our Light Vehicle Driveline segment, which was partially offset by cost-recovery actions and conversion of the sales backlog.
Adjusted EBITDA for the fourth quarter of 2023 was $156 million, compared with $176 million for the same period in 2022. Strong efficiency improvements partially offset the margin impact of the UAW strike and higher spending on development for electric-vehicle products.
The net loss attributable to Dana was $39 million, or $0.27 per share, compared with a net loss of $179 million, or $1.25 per share, in the fourth quarter of 2022 due primarily to the impact of the UAW strike, lower earnings from equity-method affiliates, and the devaluation of the Argentine peso. The loss in 2022 resulted primarily from the recording of non-cash tax valuation allowances.
The adjusted net loss attributable to Dana was $11 million, or $0.08 per share, for the fourth quarter of 2023, compared with an adjusted net loss of $15 million or $0.10 earnings per share in 2022. Operating cash flow in the fourth quarter of 2023 was $278 million, compared with $342 million in the same period of 2022. Free cash flow was $136 million, compared with $202 million in the fourth quarter of 2022. The decrease was driven by higher working capital requirements.
Full-year 2023 Financial Results
Sales for 2023 were $10.6 billion, compared with $10.2 billion in 2022. The increase of $399 million resulted from improved overall market demand and conversion of the sales backlog, combined with pricing actions and cost recoveries partially offset by the UAW strike.
Adjusted EBITDA for 2023 was $845 million, compared with $700 million in 2022 driven by refreshed and new programs, efficiency improvement actions, and more stable customer order patterns.
The net income attributable to Dana for 2023 was $38 million or $0.26 per share, compared with a net loss of $242 million or a loss of $1.69 per share in 2022. The loss in 2022 resulted from a one-time non-cash goodwill impairment charge and from non-cash tax valuation allowances.
Adjusted net income attributable to Dana was $122 million and diluted adjusted earnings per share were $0.84 in 2023, compared with an adjusted net income of $54 million and $0.37 per share in 2022.
The company reported operating cash flow of $476 million in 2023. Free cash flow was a use of $25 million, compared with free cash flow of $209 million in 2022. Cash flow use this year was driven by increased working capital requirements and higher capital spending partially offset by higher operating earnings.
“Finishing 2023 with strong results has set the stage for continued profitable growth,” said Timothy Kraus, Dana senior vice president and chief financial officer. “In 2024, we expect another record sales year, further improved margins, and higher free cash flow as we leverage the improved cross-company efficiencies and begin to benefit from the record number of new and refreshed vehicle programs.”
2024 Financial Targets
Sales of $10.65 to $11.15 billion;
Adjusted EBITDA of $875 to $975 million, an implied adjusted EBITDA margin of approximately 8.5 percent at the midpoint of the range;
Operating cash flow of approximately $475 to $525 million; and
Free cash flow of $25 to $75 million;
Diluted EPS of $0.35 to $0.85.
Dana to Host Conference Call at 10 a.m. Tuesday, Feb. 20
Dana will discuss its fourth-quarter and full-year results in a conference call at 10 a.m. EST on Tuesday, Feb. 20. The conference call can be accessed by telephone from both domestic and international locations using the information provided below:
Conference ID: 9943139
Participant Toll-Free Dial-In Number: 1 (888) 440-5873
Participant Toll Dial-In Number: 1 (646) 960-0319
Audio streaming and slides will be available online via a link provided on the Dana investor website: www.dana.com/investors. Phone registration will be available beginning at 9:30 a.m. EST.
A webcast replay can be accessed via Dana’s investor website following the call.
Non-GAAP Financial Information
Adjusted 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. We believe free cash flow is useful to investors in evaluating the operational cash flow of the company inclusive of the spending required to maintain the operations. Free cash flow is 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 may not be comparable to similarly titled measures reported by other companies.
The accompanying financial information provides reconciliations of adjusted EBITDA, diluted adjusted EPS and free cash flow to the most directly comparable financial measures calculated and presented in accordance with GAAP. We have not provided a reconciliation of our adjusted EBITDA and diluted adjusted EPS outlook to the most comparable GAAP measures of net income (loss) and diluted EPS. Providing net income (loss) 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 (loss) and diluted EPS, including restructuring actions, asset impairments and certain income tax adjustments. The accompanying reconciliations of these non-GAAP measures with the most comparable GAAP measures for the historical periods presented are indicative of the reconciliations that will be prepared upon completion of the periods covered by the non-GAAP guidance.
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,” 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 Incorporated
Dana is a leader in the design and manufacture of highly efficient propulsion and energy-management solutions that power vehicles and machines in all mobility markets across the globe. The company is shaping sustainable progress through its conventional and clean-energy solutions that 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 $10.6 billion in 2023 with 42,000 people in 31 countries across six continents. With a history dating to 1904, Dana was named among the “World’s Most Ethical Companies” for 2023 by Ethisphere and as one of “America’s Most Responsible Companies 2023” by Newsweek. The company is driven by a high-performance culture that focuses on valuing others, inspiring innovation, growing responsibly, and winning together, earning it global recognition as a top employer. Learn more at dana.com.
DANA INCORPORATED
Consolidated Statement of Operations (Unaudited)
For the Three Months Ended December 31, 2023 and 2022
Three Months Ended
(In millions, except per share amounts)
December 31,
2023
2022
Net sales
$ 2,494
$ 2,555
Costs and expenses
Cost of sales
2,330
2,375
Selling, general and administrative expenses
139
121
Amortization of intangibles
3
4
Restructuring charges, net
4
Other income (expense), net
(7)
7
Earnings before interest and income taxes
11
62
Interest income
3
5
Interest expense
40
33
Earnings (loss) before income taxes
(26)
34
Income tax expense
3
217
Equity in earnings (loss) of affiliates
(15)
5
Net loss
(44)
(178)
Less: Noncontrolling interests net income
5
4
Less: Redeemable noncontrolling interests net loss
(10)
(3)
Net loss attributable to the parent company
$ (39)
$ (179)
Net loss per share available to common stockholders
Basic
$ (0.27)
$ (1.25)
Diluted
$ (0.27)
$ (1.25)
Weighted-average shares outstanding – Basic
144.5
143.4
Weighted-average shares outstanding – Diluted
144.5
143.4
DANA INCORPORATED
Consolidated Statement of Operations
For the Year Ended December 31, 2023 and 2022
Year Ended
(In millions, except per share amounts)
December 31,
2023
2022
Net sales
$ 10,555
$ 10,156
Costs and expenses
Cost of sales
9,655
9,393
Selling, general and administrative expenses
549
495
Amortization of intangibles
13
14
Restructuring charges, net
25
(1)
Impairment of goodwill
(191)
Other income (expense), net
3
22
Earnings before interest and income taxes
316
86
Loss on extinguishment of debt
(1)
Interest income
17
11
Interest expense
154
128
Earnings (loss) before income taxes
178
(31)
Income tax expense
121
284
Equity in earnings (loss) of affiliates
(9)
4
Net income (loss)
48
(311)
Less: Noncontrolling interests net income
22
15
Less: Redeemable noncontrolling interests net loss
(12)
(84)
Net income (loss) attributable to the parent company
$ 38
$ (242)
Net income (loss) per share available to common stockholders
Basic
$ 0.26
$ (1.69)
Diluted
$ 0.26
$ (1.69)
Weighted-average shares outstanding – Basic
144.4
143.6
Weighted-average shares outstanding – Diluted
144.6
143.6
DANA INCORPORATED
Consolidated Statement of Comprehensive Income (Unaudited)
For the Three Months Ended December 31, 2023 and 2022
Three Months Ended
(In millions)
December 31,
2023
2022
Net loss
$ (44)
$ (178)
Other comprehensive income (loss), net of tax:
Currency translation adjustments
36
32
Hedging gains and losses
2
19
Defined benefit plans
(16)
48
Other comprehensive income
22
99
Total comprehensive loss
(22)
(79)
Less: Comprehensive income attributable to noncontrolling interests
(6)
(4)
Less: Comprehensive (income) loss attributable to redeemable noncontrolling interests
6
(2)
Comprehensive loss attributable to the parent company
$ (22)
$ (85)
DANA INCORPORATED
Consolidated Statement of Comprehensive Income
For the Year Ended December 31, 2023 and 2022
Year Ended
(In millions)
December …
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