Latest news with #TimothyKraus
Yahoo
01-05-2025
- Business
- Yahoo
Dana Inc (DAN) Q1 2025 Earnings Call Highlights: Navigating Challenges with Strategic Cost ...
Sales: $2.4 billion, $383 million lower than last year. Adjusted EBITDA: $188 million, profit margin of 8%. Net Income: $25 million, compared to $3 million last year. Operating Cash Flow: Use of $37 million, an improvement of $65 million year-over-year. Free Cash Flow: Use of $101 million, $67 million higher than last year. Cost Savings: $41 million in profit from cost-saving actions. Tariff Impact: $6 million in the quarter, with expected recoveries throughout the year. Foreign Currency Impact: Decreased sales by $53 million, profit lower by $4 million. 2025 Full Year Sales Guidance: Expected to be above the midpoint of the range. 2025 Adjusted EBITDA Guidance: $975 million at midpoint, 10% profit margin. 2025 Adjusted Free Cash Flow Guidance: $225 million at midpoint. 2025 Adjusted EPS Guidance: $1.40 per share at midpoint. Warning! GuruFocus has detected 5 Warning Signs with DAN. Release Date: April 30, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Dana Inc (NYSE:DAN) is accelerating its cost reduction program, increasing the target from $175 million to $225 million for 2025. The integration of the Power Technologies segment into Light Vehicle and Commercial Vehicle segments is expected to yield $30 million to $35 million in cost savings. Dana Inc (NYSE:DAN) reported a year-over-year improvement in free cash flow by $67 million in Q1 2025. The company won its 10th PACE Award for its hybrid transmission, which is expected to grow sales significantly over the next few years. Dana Inc (NYSE:DAN) is confident in recovering 100% of the tariffs imposed, with processes in place to ensure timely recovery from customers. Dana Inc (NYSE:DAN) faced a $6 million headwind from tariffs in Q1 2025, impacting margins. Sales were $383 million lower than the previous year, driven by reduced demand across all end markets. The company is experiencing a reduction in schedules for North American commercial vehicle customers, posing a potential headwind. Foreign currency translation negatively impacted sales by $53 million, primarily due to the lower value of the euro, real, and rupee compared to the US dollar. Dana Inc (NYSE:DAN) is cautious about potential risks in the light vehicle market in the second half of the year, which could affect future guidance. Q: Can you provide an update on the guidance for Dana's new business versus the off-highway segment, considering the various factors like tariffs and cost savings? A: Timothy Kraus, CFO, stated that the Commercial Vehicle segment is expected to be lower than previously anticipated, but this is offset by improvements in Light Vehicle and off-highway segments, as well as tariff offsets. Bruce McDonald, CEO, added that the incremental cost reduction target is small relative to corporate sales, and the path to achieving the 2026 margin targets for the new Dana is on track. Q: What is the exposure to tariffs, and how long do you expect the recovery process to take? A: Timothy Kraus, CFO, explained that while he couldn't disclose the overall exposure, the recovery process is expected to take less than a quarter. Most large customers have set up processes to handle tariff recoveries, and Dana has already started providing the necessary documentation to facilitate this. Q: How confident are you in achieving the $225 million cost savings target for 2025, and what are the main sources of these savings? A: Timothy Kraus, CFO, expressed strong confidence in achieving the $225 million target, noting that 70% of the savings are from headcount and engineering reductions. The company has already actioned over 70% of the planned headcount reductions, with further actions planned throughout the year. Q: With the integration of Power Technologies into other segments, does this mean the business is no longer for sale? A: Bruce McDonald, CEO, confirmed that Power Technologies is not for sale and emphasized that the integration is aimed at running the business more efficiently. The consolidation is expected to yield $30 million to $35 million in savings, with further operational improvements anticipated. Q: How does Dana plan to address the potential impact of tariffs on its operations and supply chain? A: Bruce McDonald, CEO, mentioned that while the rules around tariffs have been volatile, Dana is having discussions about potential mitigation strategies, such as reshoring and changing suppliers. However, some issues, like castings from India, cannot be addressed in the short term. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Associated Press
30-04-2025
- Business
- Associated Press
Dana Incorporated Reports 2025 First-quarter Financial Results in Line with Expectations; Maintained Sales and Adjusted EBITDA Guidance Ranges
First Quarter Highlights MAUMEE, Ohio, April 30, 2025 /PRNewswire/ -- Dana Incorporated (NYSE: DAN) today announced financial results for the first quarter of 2025. 'Our efforts to transform the company into a stronger, more focused business are gaining momentum. The sale of our Off-Highway business is underway with a competitive process. We also continue to execute our cost-savings initiative and have taken further steps to accelerate the realization of our $300 million plan,' said R. Bruce McDonald, chairman and chief executive officer. 'While the situation remains fluid, we believe the impact of tariffs are manageable based on completed mitigation actions and expected substantial recoveries from customers.' Sales for the first quarter of 2025 totaled $2.35 billion, compared with $2.74 billion in the same period of 2024. Net income attributable to Dana was $25 million, or $0.17 per share, compared with $3 million, or $0.02 per share, in the first quarter of 2024. As a percentage of sales, the first quarter of 2025 was 1 percent compared to 0.1 percent last year. During the first quarter of 2024, Dana entered into a definitive agreement to sell its non-core European Off-Highway hydraulics business. This business was classified as held for sale, and a $29 million loss was recognized to adjust the carrying value of net assets to fair value less estimated costs to sell. This sale agreement was terminated and the transaction did not close. Adjusted net income attributable to Dana was $19 million, or $0.13 per share, for the first quarter of 2025, compared with adjusted net income of $37 million, or $0.26 per share, in 2024. Adjusted EBITDA for the first quarter of 2025 was $188 million or 8 percent of sales, compared with $223 million or 8.2 percent of sales for the same period in 2024. The company's cost-savings program has mitigated the margin impact of lower volumes, tariffs, and cost inflation. Operating cash flow in the first quarter of 2025 was a use of $37 million, compared with a use of $102 million in the same period of 2024. Adjusted free cash flow was a use of $101 million, compared with a use of $168 million in the first quarter of 2024. 'Our focus on managing working capital continues to show results as we have once again improved adjusted free cash flow in the first quarter. Our cost-savings actions and efficiency improvements are helping to offset the impact of tariffs until we can affect full recovery,' said Timothy Kraus, Dana senior vice president and chief financial officer. 'We are maintaining our guidance ranges for most of our measures including adjusted EBITDA and we expect that sales will increase slightly due to tariff recoveries and currency translation offsetting weaker end-market demand.' Revised 2025 Financial Targets Dana to Host Conference Call at 9 a.m. Wednesday, April 30 Dana will discuss its first-quarter results in a conference call at 9 a.m. EDT on Wednesday, April 30. 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: Phone registration will be available beginning at 8:30 a.m. EDT. 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. Adjusted 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 plus proceeds from sale of property, plant and equipment. We believe adjusted 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. Adjusted 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. Adjusted 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 adjusted 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 $10.3 billion in 2024 with 39,000 people in 30 countries across six continents. With a history dating to 1904, Dana was named among the 'World's Most Ethical Companies' for 2025 by Ethisphere and as one of 'America's Most Responsible Companies 2025" 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 View original content to download multimedia: SOURCE Dana Incorporated
Yahoo
03-03-2025
- Automotive
- Yahoo
Suppliers slash spending, jobs, EV plans as they brace for middling new-vehicle sales
Major North American suppliers are reducing engineering and R&D spending and cutting thousands of jobs to support profit margins as they anticipate weak new-vehicle sales growth and electric vehicle sales uncertainty. Lear Corp., for example, cut about 15,000 jobs worldwide in 2024, a figure it expects to match in 2025. 'The actions we are taking will continue to improve efficiency in our operations,' said Lear Corp. CEO Ray Scott during a Feb. 6 conference call with investors. The days of suppliers touting huge investments in engineering and retooling plants for EV parts production are over. Today, it's become more fashionable for suppliers to find ways to save money in a highly uncertain market, and to prioritize free cash flow and shareholder returns. Sign up for Automotive News breaking news alerts and be the first to know when big news happens. Suppliers including Lear, Dana, Magna International and BorgWarner have detailed layoffs, factory closures and spending cuts in recent months. Companies have pointed to potentially weak new-vehicle sales growth, lower-than-expected EV production and high labor costs as reasons. The moves also come as suppliers brace for potential U.S. tariffs on Canadian and Mexican imports and higher duties on steel and aluminum, each of which are scheduled to go into effect in March. Suppliers have warned that tariffs could further reduce new-vehicle demand and raise volatility in vehicle and parts production. Some companies are being rewarded on Wall Street for their efficiency plans, none more so than Dana. Shares in the Maumee, Ohio, supplier have risen nearly 40 percent this year, thanks in part to plans outlined in January to reduce costs by $300 million through 2026. About $175 million is expected to come this year. A 'large portion' of those savings are related to shifts in the company's EV strategy, CFO Timothy Kraus said on a Feb. 20 call with analysts. Dana anticipates spending less on capital investments than in previous years, and it expects its automaker customers to provide it with more financial offsets to cover those costs in 2025, CEO Bruce McDonald said. '2025 for us is going to be a transformational year,' he said, pointing to the cost savings and the sale of its off-highway business. The moves will enable Dana to 'return capital to our shareholders and be left with the best-in-class balance sheet in our space.' McDonald was appointed CEO of Dana on Nov. 25, replacing James Kamsickas. But drastic changes are also being pursued at companies with long-time leaders at the helm. Lear, for example, is moving ahead with an aggressive plan to automate its plants and decrease head count. The 15,000 jobs it slashed last year, most of which were outside the U.S., resulted in about $150 million in annualized savings, Lear said. It closed or sold 13 factories in 2024 with plans to unload five more in 2025, all while boosting automation and artificial intelligence at its other plants. In recent months, it has acquired Spanish automation company WIP Industrial Automation and Portuguese systems integrator StoneShield Engineering to augment those efforts. Lear, the largest U.S. supplier, is pursuing a more conservative approach to capital deployment at its factories when it receives new business, Scott said. 'We're much more tempered in how we look at deploying capital, particularly in new areas of investment with our customers,' he said. BorgWarner has taken a similar approach. It looks to save $100 million through job cuts and reduced spending in its e-products division partly because of the weaker-than-expected sales of EV parts. Those moves will help the company maintain its profit margins even as it expects its sales to decline in 2025, BorgWarner CFO Craig Aaron said. 'We're going to keep our focus on cost control as we move forward,' he said on a Feb. 6 call. Magna, the largest North American supplier, is also targeting expansive cuts, particularly as it relates to engineering. The company eliminated about $124 million in engineering spending in 2024, a number expected to grow to around $500 million by 2026, CFO Pat McCann said. 'You can see that structurally, we have made a lot of changes to different activities inside our company,' CEO Swamy Kotagiri said. Magna and other suppliers are preparing for the impact of U.S. tariffs and potential retaliatory measures by other countries. The higher costs associated with the tariffs could prove to be unsustainable for much of the supply base, even after accounting for cost-saving measures, Kotagiri said. 'The industry has already been under stress for the last four years, whether it was the pandemic or the chip and other supply chain disruptions and macroeconomic interest rates,' Kotagiri told Automotive News. 'We've been clawing back some of the negative impacts that we've had, but this comes on top of that. And that's why I say it's untenable for the supply base to absorb this.' Have an opinion about this story? Tell us about it and we may publish it in print. Click here to submit a letter to the editor.
