MAUMEE,
Ohio, Jan. 24, 2025 /PRNewswire/ -- Dana
Incorporated (NYSE: DAN) today announced select, preliminary,
unaudited financial results for the full year ended December 31, 2024, presented its financial
outlook for 2025, and provided a business update including a
simplified organizational structure and the status of the proposed
sale of its Off-Highway business and cost-savings actions.
Full-Year 2024, Preliminary, Unaudited Financial
Results
- Sales of approximately $10.3
billion
- Adjusted EBITDA of approximately $885
million
- Adjusted EBITDA margin of 8.6 percent, a projected
60-basis-point improvement compared to 2023
R. Bruce McDonald,
chairman and chief executive officer said, "Dana is continuing to
execute on our strategic plan to accelerate value creation and
today's preliminary financial results are a reflection of the early
work we have done to improve our cost structure, increase our
efficiency, and create a more focused and nimbler Dana."
Mr. McDonald continued, "Our Board and leadership
team continue to take swift and bold action to position Dana for
profitable growth and value creation in any environment. Our
cost-savings actions are well underway, and we are pleased to
increase our total cost reduction target to $300 million through 2026. Our 2025 outlook
reinforces the impact of these actions, which will help solidify
Dana's leadership position and enable us to capitalize on the
strength of our traditional on-highway businesses while remaining a
leader in the EV transition."
Preliminary sales for the full year 2024 were
approximately $10.3 billion in line
with prior guidance, compared with $10.6
billion in 2023. Weakening market demand for electric
vehicles, commercial trucks, off-highway equipment, and higher
inventory of certain light truck programs drove lower sales.
Preliminary adjusted EBITDA for 2024 was
approximately $885 million or 8.6
percent of sales, compared with $845
million or 8.0 percent of sales for 2023. Efficiency
improvements and cost-savings actions offset the margin impact of
lower sales and inflation.
Preliminary free cash flow was approximately
$70 million, compared with a use of
$25 million in 2023. Higher than
expected working capital requirements in the fourth quarter lowered
free cash flow from our prior estimate.
Simplifying Organizational Structure with Two
Business Segments
Dana today also announced changes to its
reportable business segments, which will take effect in the first
quarter of 2025. The company's Power Technology segment will be
split, integrating the OEM-facing businesses into its Light Vehicle
Drive Systems segment and the aftermarket business into its
Commercial Vehicle Drive and Motion Systems segment. These changes
reflect Dana's commitment to streamlining the business, enhancing
its go-to market approach, and serving customers more efficiently.
Dana's new reportable segments will be:
- Light Vehicle Systems
- Commercial Vehicle Systems
The new organizational structure follows the
Company's November 25, 2024,
announcement that it is pursuing a sale of its Off-Highway
business, which continues to advance. The Board believes the sale
will unlock substantial value for shareholders and that proceeds
from a potential sale will enable Dana to strengthen its balance
sheet through substantially reduced leverage and to return capital
to shareholders. While the Company and its advisors believe there
is strong interest in the business and an agreement may be
announced by the reporting of first quarter earnings, there can be
no assurance that the sale process for Off-Highway will result in a
transaction. The Off-Highway segment will be reported as
discontinued operations once an agreement is reached.
Select 2025 Financial Targets (Includes
Off-Highway business for the full year)
- Sales of $9.525 to $10.025 billion;
- Adjusted EBITDA of $925 to $1,025
million, an implied adjusted EBITDA margin of approximately
10.0 percent at the midpoint of the range; and
- Free cash flow of $175 to
$275 million.
"Today we are providing guidance on our sales,
adjusted EBITDA, and free cash flow targets for 2025," said
Timothy Kraus, senior vice president
and chief financial officer. "While sales are expected to be lower
for the year, mainly driven by lower demand for off-highway
equipment and translation of foreign currency, the impact of our
cost-savings actions totaling $175
million in 2025 and efficiency improvements will drive
higher margins. Improved working capital efficiency and reduced
capital expenditures will increase free cash flow. Primarily due to
the annualized benefit of our cost reduction actions, we expect
2026 adjusted EBITDA margin of between 9.5 to 10.5 percent. Over
the business cycle we expect free cash flow to be approximately
four percent of sales and maintain one times net leverage."
Dana to Host Conference Call at 9 a.m., Friday, Jan.
24
Dana will discuss its third-quarter results in a conference call at
9 a.m. EST on Friday, Jan. 24. 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 8:30 a.m. EST.
A webcast replay can be accessed via Dana's investor website
following the call.
Non-GAAP Financial Measures
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.
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.
Please reference the "Non-GAAP financial
information" accompanying our quarterly earnings conference call
presentations on our website at www.dana.com/investors for
reconciliations of adjusted EBITDA 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 outlook to the most comparable GAAP measures of net
income. Providing net income (loss) 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, including restructuring actions, asset
impairments and income tax valuation adjustments. The
reconciliations of these non-GAAP measures with the most comparable
GAAP measures for the historical periods presented on our website
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
and 2024 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.
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SOURCE Dana Incorporated