Dana Incorporated (NYSE: DAN) today announced financial results for the first quarter of 2020.
“The response to the global pandemic is presenting unprecedented challenges for Dana as well as our people, customers, suppliers, and communities,” said James Kamsickas, Dana chairman and CEO. “The rapid onset of containment measures and disruption to production schedules has challenged our organization like never before. However, I am very proud of how our people have responded and the decisive actions we have taken to protect our employees, communities, customers, and future. As we work toward bringing our operations back online, we will continue to take appropriate measures to ensure the safety of our people while also serving the needs of our customers.”
First-quarter 2020 Financial Results
Sales for the first quarter of 2020 totaled $1.93 billion, compared with $2.16 billion in the same period of 2019. The decrease is primarily attributable to weaker demand in the heavy- vehicle markets in January and February of this year and the rapid reduction in production across all mobility markets in March as a result of the global response to the COVID-19 pandemic. These declines were partially offset by the conversion of sales backlog and the benefit of recent acquisitions.
Dana reported net income of $38 million for the first quarter of 2020, compared with net income of $98 million in the same period of 2019. The difference was primarily due to lower market demand and a goodwill impairment charge of $51 million arising from the negative effect of the COVID-19 pandemic. It was partially offset by discrete income tax benefits of $32 million, primarily resulting from recording additional U.S. deferred tax assets related to foreign tax credits.
Reported diluted earnings per share were $0.26, compared with diluted earnings per share of $0.68 in the first quarter of 2019.
Adjusted EBITDA for the first quarter of 2020 was $205 million, compared with $257 million for the same period last year. Profit decline in the first quarter of 2020 compared with the same period in 2019 was driven by lower end-market demand for heavy vehicles early in the quarter and the reduced production environment in March. Partially offsetting the market impacts were the profitable conversion of new business backlog and inorganic growth. Effective cost management actions in the first quarter were successful in mitigating the margin impact of the rapid sales decline.
Diluted adjusted earnings per share were $0.47 in the first quarter of 2020, compared with $0.78 in the same period last year. The lower year-over-year comparison was primarily due to lower earnings and higher depreciation expense.
Operating cash flow in the first quarter of 2020 was a use of $51 million, compared with a use of $16 million in the same period of 2019.
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SOURCE: Dana
