Dana Incorporated announces preliminary 2016 financial results, provides guidance for 2017
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Jan 11,2017
Dana Incorporated (NYSE: DAN) today announced preliminary financial results for 2016 and guidance for 2017. Preliminary results for 2016 are in line with the company’s previous guidance, and the 2017 forecast reflects increased sales and adjusted EBITDA.
Preliminary 2016 Financial Results Announced1
Sales of $5.8 billion;
Adjusted EBITDA of $660 million, 11.3 percent of sales
Preliminary sales for the year approximated $5.8 billion, about 4 percent lower than 2015, primarily due to foreign-currency translation that reduced sales by approximately $170 million. Sales from new business wins and strong North American vehicular markets partially offset weaker demand in the global off-highway and Brazilian markets.
Preliminary adjusted EBITDA for 2016 was approximately $660 million, or 11.3 percent of sales, a 50 basis-point improvement over 2015. Adjusted EBITDA benefited by $15 million from marketable securities gains and recoveries in a subsidiary of which $8 million was recognized in the fourth quarter. This subsidiary was divested at the end of the fourth quarter of 2016.
Company Updates Sales Backlog
Dana’s 2017-2019 sales backlog as of Dec. 31, 2016, remains strong at $750 million. The current backlog benefited from increased new business, primarily in the Light Vehicle Driveline segment, overcoming the effects of foreign currency and lower commercial-vehicle and off-highway market demand.
Company Issues 2017 Guidance
End-market demand for light trucks is expected to improve slightly in 2017. In the medium/heavy-truck sector, lower North American Class 8 truck production will be mostly countered by higher demand in other regions. Off-highway market demand levels are anticipated to be relatively comparable or modestly higher compared with 2016. Increased sales from new business backlog are expected to add approximately $175 million to sales. Currency is expected to be a headwind of about $150 million.
Adjusted EBITDA margin in 2017 is expected to improve by approximately 10 basis points. This is driven by higher sales levels and improved cost performance, which more than offsets the impact of currency and the benefit from gains in 2016 of a divested subsidiary.
Capital spending is expected to remain at an elevated level due to continued investment supporting the strong new business backlog.
In the fourth quarter of 2016 the company announced a definitive agreement to purchase the power-transmission and fluid power businesses of Brevini Group, S.p.A. This transaction is expected to close in the first quarter of 2017, adding approximately $350 million to 2017 sales and $35 million to Adjusted EBITDA.
Dana’s financial guidance for 2017 is presented below both, excluding and including the Brevini acquisition:
Sales of $5.8 to $6.0 billion, or $6.2 to $6.4 billion, including the acquisition;
Adjusted EBITDA of $660 to $690 million, or $695 to $725 million, including the acquisition;
Adjusted EBITDA as a percent of sales of 11.3 to 11.5 percent;
Diluted adjusted EPS2 of $1.75 to $1.85, or $1.85 to $1.95, including the acquisition;
Capital spending of $340 to $360 million, or $350 to $370 million, including the acquisition;
Free cash flow of $50 to $70 million, or $60 to $80 million, including the acquisition.
1Net income and diluted EPS guidance is not provided, as discussed below in Non-GAAP Financial Information.
2As disclosed previously, it is reasonably possible that the company may release its valuation allowance against certain U.S. deferred tax assets. In the event of this occurrence, the 2017 diluted adjusted EPS targets would be approximately $0.20 lower than presented above.
“This past year was a very positive evolution for Dana as we executed our plan and exceeded our commitments. We successfully launched multiple customer programs and, once again this year, improved our profitability through cost performance and new business growth.” said Mr. James Kamsickas, Dana president and chief executive officer. “In addition to investments that support our growing business, we have selectively taken action to grow inorganically by acquiring three businesses that align with our strategy.
“We now look forward to 2017, as we expect to close and integrate the Brevini acquisition, which will add new growth opportunities in our Off-Highway business. We will also have another year of important new program launches in our Light Vehicle driveline segment.”
Dana to Present at 2017 Deutsche Bank Global Auto Industry Conference Today
President and Chief Executive Officer James Kamsickas and Executive Vice President and Chief Financial Officer Jonathan Collins will provide a brief overview of the company and answer questions for approximately 40 minutes, beginning at 3:55 p.m. EST.
Information on accessing the webcast will be posted to Dana’s Investor website, www.dana.com/investors, prior to the event.
(Dana)
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1.The news above mentioned with detailed source are from internet.We are trying our best to assure they are accurate ,timely and safe so as to let bearing users and sellers read more related info.However, it doesn't mean we agree with any point of view referred in above contents and we are not responsible for the authenticity. If you want to publish the news,please note the source and you will be legally responsible for the news published.
2.All news edited and translated by us are specially noted the source"CBCC".
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